KUALA LUMPUR (March 3): The FBM KLCI is likely to track the overnight gains at Wall Street and most global markets today and trade a tight range above the psychologically crucial 1,800-point level, although the broader market sentiment may remain somewhat tepid.

U.S. stock prices rallied on Monday, with the Nasdaq composite crossing 5,000 for the first time in 15 years, while the dollar touched an 11-year high on expectations the Federal Reserve will raise interest rates later this year.

Wall Street kicked off March on a high note after a stellar February, when the benchmark S&P 500 Index registered its best monthly gain since October 2011. The S&P and Dow Jones industrial average posted record closing highs on Monday.

Asian stocks ended higher after China cut interest rates over the weekend, but European equities slipped from seven-year highs hit on merger activity in the telecom sector.

AllianceDBS Research in its evening edition Monday said that despite the up close last Friday, the FBM KLCI had on March 2 traded within the previous day’s range to form an inside day bar as market participants chose not to stage follow through buying support.

It said that in the absence of strong buying interest, the benchmark index was in the red throughout most of the trading sessions before settling at 1,817.13 (- 4.08, - 0.22%).

“In the broader market, losers outnumbered gainers with 617 stocks ending lower and 313 stocks finishing higher. That gave a market breadth of 0.50 indicating the bears were in control,” it said.

AllianceDBS Research said the inside day bar indicated a pause in the game play despite that market settlements above the 1,818 level on Feb 26 & 27 should have lead to another day of follow through buying on March 2.

The research house said the inability of the benchmark index to trade higher than last Friday’s high of 1,825.65 suggested that market participants were unwilling to take the chance of playing a more aggressive buying the game.

“The market basically is still viewed positive with trading activities above the 1,800 level.

“However, the buying momentum is seen fizzling out with sellers keeping a close watch on the market. The initial alert of a weakening market should be generated when the benchmark index slips below the 1,810 level,” it said.

Indicator wise, the MACD is below the 9-day moving average line, said the research house.

“The analysis of overall market action on March 2 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,812.35 level on March 3,” said AllianceDBS Research.