business
1,700-level still a psychological hurdle for KLCI
The FBM KLCI is expected to trend upward today with the 1,700-point level still a psychological level for the local index as profit taking may limit the gains at the local bourse.
Oil prices jumped on Monday as optimism rose that major producers might reach a price support deal, helping US stocks to notch a fifth straight session of gains, according to Reuters.
Brent hit its highest level since December, climbing US$2.12 (RM8.62), or 5.5%, to settle at US$40.84 a barrel, while US crude rose US$1.98, or 5.5%, to settle at US$37.90, it said.
AllianceDBS Research in its evening edition Monday said that led by last Friday’s up close, the FBM KLCI had on March 7 crossed into the 1,700 zone again to reach an intraday high of 1,710.20 as market participants continued to play on the buying side in anticipation of a higher market.
It said under the persistent buying interest, the benchmark index was in the green throughout the trading sessions before settling off the day’s high at 1,697.93 (up 5.44 points or 0.32%).
“In the broader market, losers outnumbered gainers with 594 stocks ending lower and 317 stocks finishing higher. That gave a market breadth of 0.53 indicating the bears were in control,” it said.
AllianceDBS Research said the crossover of 1,700 psychological level to reach an intraday high of 1,710.20 on March 7 was a good attempt to pave the way upward.
“However, the benchmark index fell back below the 1,700 level as profit taking activity pushed the market downward.
“This indicated that many market participants were still unwilling to establish new stock positions for fear of sudden market reversal.
“Furthermore, the benchmark index has risen by 59 points in the last 5 days measuring from the low of 1,651 (February 29) to the high of 1,710 (March 7),” it said.
The research house said given the proximity of market settlement to the 1,700 psychological level, new buying attempts to break the 1,700 level could not be ruled out.
It said a crossover of 1,700 followed by a minimum of 3 settlements above the 1,700 level should see the market gearing towards the next resistance at 1,730, adding that indicator wise, the MACD was above the 9-day moving average line.
“The analysis of overall market action on March 7 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,710.20 level on March 8,” said AllianceDBS Research.
Based on corporate announcements and news flow today, companies that may be in focus tomorrow (Tuesday, March 8) could include the following: AWC Bhd, Nexgram Holdings Bhd, Carimin Petroleum Bhd, TSR Capital Bhd, PBA Holdings Bhd, Gadang Holdings Bhd, Damansara Realty Bhd, Reach Energy Bhd, CLIQ Energy Bhd, Encorp Bhd and Len Cheong Holdings Bhd. – The Edge Markets, March 8, 2016.
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