FMB KLCI - DAILY - 19/4/2019
Attempting To Find Support
• Despite recovering most of its intraday losses, the FBM KLCI (-0.1%) trended lower for the third straight session in line with the general weakness across the stockmarkets in the Asia Pacific region. The lower liners managed to close mostly higher after recovering all their intraday losses as the FBM Small Cap and FBM ACE added 0.3% and 1.4% respectively, while the broader market closed mixed.
• Market breadth stayed negative as decliners outstripped advancers on a ratio of 451-to-397 shares. Traded volumes fell 6.8% to 2.86 bln shares as investors remain wary of the recent negative market sentiment.
• Petronas Dagangan (-18.0 sen) topped the local bourse decliner’s list, followed by Maxis (-12.0 sen), Top Glove (-7.0 sen), Hong Leong Bank (-6.0 sen) and IHH (-5.0 sen). Amongst the biggest losers on the broader market were Ajnomoto (-28.0 sen), Heineken (-22.0 sen), Panasonic (-20.0 sen) and Batu Kawan (-18.0 sen). Allianz (-20.0 sen), meanwhile, recorded its seventh consecutive session of decline.
• On the flipside, significant advancers on the broader market include BAT (+28.0 sen), Pentamaster (+12.0 sen), Tasek Corporation (+10.0 sen), Time dotCom (+10.0 sen) and Toyoink (+10.0 sen). Key winners on the FBM KLCI were Nestle (+50.0 sen), KLK (+12.0 sen), Tenaga (+10.0 sen), Am Bank (+5.0 sen) and MISC (+5.0 sen).
• Asia benchmark indices ended in the red on renewed profit taking activities from the recent run-up as the Nikkei (-0.8%) halted a five-day winning streak. The Shanghai Composite fell 0.4%, while the Hang Seng Index declined 0.5%. ASEAN equities, meanwhile, closed mostly lower yesterday.
• U.S. stockmarkets staged a sharp recovery ahead of the extended Good Friday weekend break as the Dow added 0.4%, boosted by the sturdy retail sales data that rose 1.6% Y.o.Y in March 2019 – the biggest expansion since September 2017. On the broader market, the S&P 500 gained 0.2% to reclaim the 2,900 psychological level, while the Nasdaq finished 0.02% higher.
• European benchmark indices finished mostly higher as the CAC and DAX climbed 0.4% and 0.5% respectively after the Euro Currency retreated against the Greenback. Despite reporting an unexpected stronger-than-expected retail sales data that rose 6.7% Y.o.Y in March 2019, the FTSE (-0.2%) bucked by the positive performance across its regional peers.
THE DAY AHEAD
• Although the FBM KLCI managed to trim its losses yesterday, the general market outlook remains dour as sentiment are still very much guarded, affected by the latest setback to the country’s fundamentals with government bonds threatened by explusion from the World Government Bond Index.
• Nevertheless, we think that the FBM KLCI could be attempting to find some support around the 1,620 level which is also around its lowest level in three years. While there remains few positivity, we see support from mild bargain hunting activities as fresh buying is still largely absent with most market players on a cautious mode. The bargain hunting could allow the key index to keep a mostly sideway trend to end the week with mild upsides seen. The supports remain at 1,614-1,618 levels, while the resistances are at 1,627 and 1,630 respectively.
• The FBM Small Cap has done relatively well to buck the weakness among the index heavyweights and is likely to continue seeing selective buying support from retail players. However, with the cautiousness still dominating market sentiments, we think that any gains will be limited on quick profit taking actions.
The Market Pulse is a proprietary report courtesy of Malacca Securities Sdn Bhd (a participating organisation of Bursa Malaysia Securities Berhad) and has been abbreviated by Focus Malaysia. The report is for information purposes only and is not a recommendation to buy or sell any securities or financial instruments.
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