KLCI to trade range bound, hurdle at 1,685

KLCI to trade range bound, hurdle at 1,685
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KUALA LUMPUR (Jan 7): The FBM KLCI is seen trading range bound today with immediate hurdle at 1,685.

Equities around the globe rallied on Friday while bond yields rose after sharply declining earlier in the week as U.S. employment data pointed to economic strength and Federal Reserve Chair Jerome Powell said the U.S. central bank would be patient with monetary policy, according to Reuters.

U.S. and European stocks got a boost as the stronger-than-expected jobs report soothed some concerns of slowing economic growth. That was welcome news to investors after sharp declines on Thursday following Apple Inc's cut in its revenue forecast, it said.

In U.S. equities, the Dow Jones Industrial Average rose 746.94 points, or 3.29 percent, to 23,433.16, the S&P 500 gained 84.05 points, or 3.43 percent, to 2,531.94 and the Nasdaq Composite added 275.35 points, or 4.26 percent, to 6,738.86, said Reuters.

AllianceDBS Research in its evening edition Jan 4 said the FBMKLCI had on Jan 4 2019 traded within previous day’s range to form an inside day bar.

It said in the absence of buying or selling interest, the benchmark index was moving between the red and green zones before settling at 1,669.78 (down 6.05 points or 0.36%).

“In the broader market, gainers outnumbered losers with 492 stocks ending higher and 349 stocks finishing lower. That gave a market breadth of 1.40 indicating the bulls were in better control,” it said.

AllianceDBS Research said the inside day bar indicated a pause in the game play with buyers and sellers seen in a balanced position.

It said a selling attempt with an opening level of 3.25 points lower than previous day’s settlement was initiated after the external negative market development, but the market did not go far down.

“Market participants were again seen unwilling to be aggressive in the selling game on Jan 4 for fear of snap back as sellers had on Jan 3 chosen not to sell aggressively when the down close on Jan 2 offered an opportunity for sellers to trigger a snow ball rolling effect.

“An examination of the way this market carried itself on Jan 3 & 4 suggested that market participants were actually waiting patiently for a better timing to trade the market.

“In other words, market participants wanted to minimize distractions and have a set of rules to follow. Market support is pegged at 1,666. A fall below 1,666 would see the market moving down to next support at 1,658,” it said.

The research house said following the down close on Jan 4, there should be selling attempt with immediate hurdle at 1,685.

“The analysis of overall market action on Jan 4 revealed that buying power was weaker than selling pressure.

“As such, the FBMKLCI would likely trade below the 1,668.15 level on Jan 7,” said AllianceDBS Research.

Based on corporate announcements and news flow last Friday, companies that may be in focus today could include the following: Malaysia Airports Holdings Bhd, LBS Bina Group Bhd, Spring Gallery Bhd, PUC Bhd and Ho Wah Genting Bhd.