KLCI to consolidate, 1,765-1,700 level seen

As the analysis of overall market action yesterday reveals that buying power is stronger than selling pressure, the FBM KLCI would likely trade above the 1,694.33 level today. – AFP file pic, March 11, 2016. The FBM KLCI is expected to consolidate today with 1,675 to 1,700 point level seen as the likely level for the index going into the weekend, in line with the overnight dip at most global markets.

The euro jumped and global stock markets fell yesterday as new stimulus measures by the European Central Bank were offset by a signal from its chief Mario Draghi that it would cut interest rates again only in the most extreme of circumstances.

Investors had initially cheered the ECB's announcement that it will cut rates to fresh record lows, start buying corporate debt for the first time and effectively begin paying banks to borrow from it to lend to companies and households, it said.

AllianceDBS Research in its evening edition Thursday said despite the down close in the preceding day, the FBM KLCI had on March 10 traded higher to 1,694.33 as market participants chose to play on the buying side in anticipation of a higher market.

It said that in the absence of stronger selling interest, the benchmark index was in the green throughout most of the trading sessions before settling at 1,690.91 (up 4.56 points or 0.27%).

“In the broader market, gainers outnumbered losers with 441 stocks ending higher and 355 stocks finishing lower. That gave a market breadth of 1.24 indicating the bulls were in control,” it said.

AllianceDBS Research said the market continued to hold its position above the 1,685 level on March 10 as market participants took the chance to play a buying game after the encouraging settlement of 1,686.35 on March 9.

“Given the way this market carried itself in the last 2 days, buyers were seen in better control over the sellers.

“Thus, the market is expected to consolidate between 1,675 and 1,700 in the coming few days.

“A crossover of 1,700 would see a test of next hurdle at 1,730,” it said.

The research house said that indicator wise, the MACD was above the 9-day moving average line.

“The analysis of overall market action on March 10 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,694.33 level on March 11,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that may be in focus today could include the following: Malaysia Building Society Bhd, Malaysia Airports Holdings Bhd, Kimlun Corporation Bhd, Zecon Bhd, Scomi Engineering Bhd, SMTrack Bhd, KESM Industries Bhd, ML Global Bhd, KNM Group Bhd, Ho Hup Construction Bhd and Key Alliance Group Bhd. – The Edge Markets, March 11, 2016.