Market Preview Global equity markets’ weakness to dampen sentiment at Bursa Malaysia

by **Cals** Thu 05 May 2016, 07:32

Market Preview

[size=28]Global equity markets’ weakness to dampen sentiment at Bursa Malaysia

By Surin Murugiah / theedgemarkets.com | May 5, 2016 : 6:12 AM MYT

KUALA LUMPUR (May 5): Stocks on Bursa Malaysia may be lacklustre today in line with the weaker overnight performance at global equity markets.
The bounce yesterday at Bursa Malaysia may not be entirely sustainable given the lack of local catalysts to perk up sentiment at Bursa Malaysia.
Global equity markets fell for a second straight day on Wednesday on mostly weak economic data while metals prices slipped on renewed concerns of a downturn in global growth, according to Reuters.
The U.S. services sector expanded in April as new orders and employment accelerated, but the growth outlook dimmed on another report showing private employers hired the fewest number of American workers in three years last month, it said.
AllianceDBS Research in its evening edition Wednesday said that dampened by the down close in the preceding day, the FBM KLCI had on May 4 dipped below the 1,640 support to reach an intraday low of 1,636.05 as market participants continued to play on the selling side in anticipation of a lower market.
However, it said non-follow through selling pressure in the area of 1,636.05 saw the emergence of bargain hunting interest. This lifted the benchmark index back up to settle near the day’s high at 1,657.58 (up 6.14 points or 0.37%).
“In the broader market, gainers outnumbered losers with 483 stocks ending higher and 342 stocks finishing lower. That gave a market breadth of 1.41 indicating the bulls were in control,” it said.
AllianceDBS Research said the downside violation of the 1,640 support to a low of 1,636.05 on May 4 was seen as an attempt made by certain market participants to flush out the weak holders.
“More buyers were seen willing to acquire stock positions in the game play on May 4, because the recent sell off had placed the market in a deep oversold zone.
“This somehow provides an opportunity for the risk taking buyers to establish stock positions.
“Given the strong up close on May 4, the market could have found its support at 1,636,” it said.
The research house said a follow through buying interest can thus be expected in the next market day with resistance zone seen between 1670 and 1,676.
It said that indicator wise, the MACD is still below the 9-day moving average line.
“The analysis of overall market action on May 4 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,659.44 level on May 5,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that may be in focus today could include the following: Sumatec Resources Bhd, R&A Telecommunication Group Bhd, MAA Group Bhd, Fraser & Neave Holdings Bhd, Kobay Bhd, Nexgram Holdings Bhd and Daibochi Plastic & Packaging Industry Bhd.
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