REVIEW: The closely-followed Dow Jones Industrial Average set a new record in overnight session, lifted by better-than-expected corporate earnings and over on the New York Mercantile Exchange, crude oil prices recovered to within striking distance of the US$50 psychological level the previous Friday, boosted by a latest report about huge inventory drawdowns.
Riding on the US markets’ strength, Bursa Malaysia started out the new week on a steadier platform, with the FBM Kuala Lumpur Composite Index (FBM KLCI) chalking up 0.82 point to 1,767.90 on renewed bargain hunting interest.
Though there was some degrees of buying in the market in early business, most investors were hesitated to chase stocks while regional equities traded cautiously on geopolitical concerns after North Korea conducted another missile test that has the ability to strike the US mainland.
In the absence of fresh stimulus on the horizon, the local bourse subsequently drifted sideways on sporadic buying offsetting selling and that was the trading pattern until the late hour where an unexpected bout of liquidation dragged the key index to settle at the day’s low.
At the final bell, the local bourse lost some 7.05 points to 1,760.03, pulled down by select quality issues, especially in the financial sector, as a meltdown in Lotte Chemical Titan Holding Bhd shares sent jitters across the board on Monday.
The index’s closing at the day’s ebb was not a good sign, but a negative signal technically. setting the stage for more downward momentum the next day.
However, Bursa Malaysia avoided a beating this time round, as a series of record breaking Dow and a sustained rally in crude oil prices, propelling the black commodity to above the US$50 mark for the first time in two months on growing signs that the oil market is coming back into balance, helped soothe investors.
A firmer regional trend added to the upbeat mood.
In line with overseas performance, the local bourse rebounded, but largely due to gains in the blue chips amid buying from the big boys.
Elsewhere, most second and lower liners skidded on lack of support from retail investors.
Apparently, the two-tier market condition was clearly displayed on the scorecard.
In spite of the market recovering some 5.10 points to 1,765.13, decliners outnumbered advancers overwhelmingly by 541 to 298 on Tuesday.
Blue chips at home continued to attract follow-through intrest on Wednesday, as the bulls on Wall Street charged forward and set record for the fifth consecutive session in overnight session while the blockbuster earnings report from tech giant Apple looked set to carry the Dow higher through the magical 22,000 points soon.
A positive regional market also provided encouragement for institutional players to nibble but the two-tier market condition was apparent, with second and third liners mostly in the red.
In mixed note, the FBM KLCI added 5.48 points to 1,770.61, but losers again overwhelmed winners by 444 to 386 in mid-week.
Thereafter, Bursa Malaysia was generally in consolidation mode in the absence of new stimulus, with regional markets struggling owing to an apparent profit-taking activity despite Wall Street beating records to make a fresh all-time highs, as the local investors turned cautious after a private survey showed China’s services sector cooled in July, triggering fears the world’s second-largest economy may slow in the coming months.
In range-bound pattern, the FBM KLCI eked out a small plus note, up 1,29 points to 1,771.90 in mixed trading on Thursday.
In another sluggish session, the key index crawled back from an intra-day low of 1,770.14 in mid-morning to finish up 2.63 points to 1,774.53 on extended consolidation yesterday.
Statistics: Week-on-week, the benchmark index edged up 7.45 points, or 0.4% to 1.774.53 yesterday, compared with 1,767.08 on July 28.
Total turnover for the regular week amounted to 8.733 billion shares valued at RM9.788bil, against 7.88 billion units worth RM9.031bil changed hands the prior week.
Outlook: The local bourse extended the recovery, with the FBM KLCI advancing for the third straight week amid continuous bargain hunting interest.
However, gains were limited and the overall market sentiment was very much subdued while investors adopted a cautious approach the past week, thus keeping Bursa Malaysia underperformed against its overseas peers.
In addition, the scoareboard painted an ugly pictogram, with more losers than advancers and theoretically, an uptrend trend under such condition usually is not sustainable and hence, investors are advised to stay vigilant in the short-term.
Technically, except for the weekly slow-stochastic momentum index, which was expanding downward to keep the bearish signal, other indicators were either improving or getting better, implying the local bourse may tick higher, but on a slow pace, very similar to what we had seen the past few weeks, unless there is a drastic change in risks appetite.
The near-term upside objective is to challenge the 1,800 points psychological barrier, of which a clear breakout will see the bulls becoming more aggressive.
On the opposite, a crack of the 1,700 points concrete floor will have a negative impact on the market outlook going forward.