KLCI to extend gains, gear toward 1,642
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KLCI to extend gains, gear toward 1,642
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[size=28]KLCI to extend gains, gear toward 1,642[/size]
By Surin Murugiah / theedgemarkets.com | June 21, 2016 : 5:53 AM MYT
[size=14]KUALA LUMPUR (June 21): The FBM KLCI is expected to extend its gains today and gear toward the 1,642-point level in tandem with the overnight gains at most global markets.
Global stock indexes jumped on Monday and sterling posted its strongest gain since 2008 after polls showed support for Britain staying in the EU strengthened before Thursday's referendum, according to Reuters.
At the start of what could be a frenetic weak for global markets, safe-haven assets such as government bonds and gold retreated. Monday's surge in equities helped Wall Street recover from losses last week, when the chances of the United Kingdom exiting the EU, or "Brexit," appeared to be growing, it said.
AllianceDBS Research in ite evening edition Monday said the FBM KLCI had on June 20 opened the day on a firm note.
It said the benchmark index subsequently traded to a high of 1,635.51 as market participants continued to play on the buying side in anticipation of a higher market.
The research house said that in the absence of stronger selling interest, the benchmark index was in the green throughout trading sessions before settling near the day’s high at 1,634.23 (up 10.05 points or 0.62%).
“In the broader market, losers outnumbered gainers with 370 stocks ending lower and 361 stocks finishing higher. That gave a market breadth of 0.97 indicating the bears were in control. With the bulls closely matched,” it said.
AllianceDBS Research said the higher high on June 20 indicated that buyers were in better control over the sellers.
“The crossover of 1,635 to an intraday high of 1,635.51 was seen an encouraging buying attempt to pull the market away from the immediate risk of breaking below 1,622.
“Moreover, the ability on the part of benchmark index to protect its fort at 1,622 is seen necessary in order to prevent the market sentiment from deteriorating given the recent market fall from the high of 1,664 (June 9) to the low of 1,613 (June 16).
“With the downside gap left behind on June 13 still unfilled, buyers are expected to stay cautious in their game play,” it said.
The research house said a crossover of 1,635 again should see the market gearing towards 1,642, adding that indicator wise, the MACD is marginally above the 9-day moving average line.
“The analysis of overall market action on June 20 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,635.51 level on June 21,” said AllianceDBS Research.
Based on corporate announcements and news flow today, the companies that may be in focus on Friday (June 21) could include the following: Bina Puri Holdings Bhd, Destini Bhd, Sunway REIT, Puncak Niaga Holdings Bhd, Berjaya Sports Toto Bhd and Sanichi Technology Bhd.
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