business
KLCI set to open higher, cross 1,700-level
The FBM KLCI is set to open higher today in line with the weekly gains posted at most global markets last Friday and cross its 1,700-point psychological level.
A gauge of stock markets worldwide rose to a two-month high on Friday, posting its largest weekly gain since October, as oil and other commodity prices firmed and strong US jobs growth bolstered confidence in the global economy, according to Reuters.
The recovery in commodities lifted emerging markets shares, which rose 1.6% on the day. MSCI's emerging-market stock metric posted its largest one-week gain since December 2011, it said.
AllianceDBS Research in its evening edition last Friday said despite the down close in the preceding day, the FBM KLCI had on March 4 crossed over the 1,700 psychological level to reach an intraday high of 1,700.49 as market participants chose to play a buying game.
It said in the absence of stronger selling interest, the benchmark index was in the green throughout most of the trading sessions before settling at 1,692.49 (+4.29, +0.25%) ahead of weekend.
“In the broader market, losers outnumbered gainers with 463 stocks ending lower and 334 stocks finishing higher. That gave a market breadth of 0.72 indicating the bears were in control,” it said.
AllianceDBS Research said the higher low on March 4 indicated the presence of supportive buying interest in the area of 1,685.
“There was an attempt to break the 1,700 psychological level on the upside after the opening bell on March 4, but buyers apparently were seen unwilling to play an aggressive buying game.
“Moreover, market participants often choose not to carry large stock positions over the weekend for fear of unexpected negative market development.
“Given the market action in the last 2 days, buyers and sellers would continue to exchange their stock positions until we see a breakout of 1,700,” it said.
The research house said a crossover of 1,700 should see the market paving the way towards the next hurdle at 1,730.
It said that indicator wise, the MACD was above the 9-day moving average line.
“The analysis of overall market action on March 4 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,700.49 level on March 7,” said AllianceDBS Research.
Based on corporate announcements and news flow last Friday, companies that may be in focus today could include the following: Ranhill Holdings Bhd, Kuantan Flour Mills Bhd, Felda Global Ventures Holdings Bhd, Teck Guan Perdana Bhd, Comfort Gloves Bhd, Media Chinese International Ltd, Hibiscus Petroleum Bhd and Genetec Technology Bhd. – The Edge Markets, March 7, 2016.
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