KUALA LUMPUR (Sept 29): Inter-Pacific Securities Sdn Bhd said although yesterday’s gains were welcome to allow the FBM KLCI to break out of its rangebound trend, it remains to be seen if the upsides can be sustained.
In its daily bulletin today, the research house said the FBM KLCI staged a firm uptrend yesterday, helped by rotational interest among index linked constituents, particularly the beaten-down glovemakers and oil & gas plays that regained ground with the help of increased foreign interest.
However, it said notwithstanding the FBM KLCI’s gains, the broader market was mostly unexciting that saw losers still ahead of gainers for the day.
It said technology related companies were the big losers as more profit taking emerged following their recent gains.
Inter-Pacific said it sees market conditions still mostly indifferent amid the lack of fresh catalysts, but the rekindled interest in oil & gas stocks and other laggards may help to preserve much of the gains.
“In the interim, quick profit taking could emerge of some of the recent gainers following the weakness in global equities overnight that was spooked by fresh inflationary concerns.
“Hence, we think the cautious trend may re-emerge and stock prices could be pressured again even as we still see pockets of supports that may allow the key index to stay above the 1,540 support for now.
“Below that, the other support is at 1,533 points, while the psychological 1,550 level is the immediate hurdle, followed by 1,557 points,” it said.
Inter-Pacific said that meanwhile, most of the lower liners and broader market shares could still be largely rangebound as the cautious sentiments is likely to keep most market players on the sidelines.
“There is still a dearth of noteworthy leads to attract retail players back into the market and the corresponding lack of participation will also keep most of these stocks subdued for now,” it said.