PETALING JAYA: The FTSE Bursa Malaysia KLCI (FBM KLCI) staged a strong rebound in the afternoon trading session yesterday after a sharp decline in the morning.
The benchmark index fell from its intra-day high of 1,169.05 points to the day’s low of 1,156.19 points and closed 4.64 points lower at 1,164.41.
The index has gained more than 30% year-to-date.
Dealers said the 0.4% fall in the index was “not a lot” and it had recovered a lot of lost ground from the morning trade. They said the index-linked counters were lagging yesterday.
“Yesterday’s (Monday) oversold (situation) was in tandem with the US markets. It was just a knee-jerk reaction due to the news on lower consumer confidence index in the US.
“Most regional markets such as Japan, Hong Kong, Shanghai and Singapore also rebounded strongly yesterday,” an analyst said, adding he expected FBM KLCI to turn positive today.
The analyst said although the mid-term uptrend remained intact, volatility would fuel the trading floor over the near term.
OSK Investment Bank, in a report, said across East Asia, markets had rallied to the levels last seen in late 2006 and early 2007, indicating that markets were significantly overvalued and ripe for a retracement.
On the corporate results, OSK said there were more outperformers this season, leading to an upward revision in earnings estimates.
“We believe this results season will see more upgrades than downgrades,” it added.
Morgan Stanley Research said the Malaysian market traditionally enjoyed a valuation premium to the emerging markets asset class.
“This is related to the lesser degree of cyclicality in earnings and higher than average dividend yield, due to the relatively high weightings in domestic demand stocks.
“However, this low beta characteristic is less attractive during phases of global economic recovery,” it said.
SJ Securities said FBM KLCI’s trend had reversed to the downside, following the breach of the moving averages at 1,178 points, and was confirmed by the negative moving average convergence/divergence indicator.
It said with the upside capped at 1,178 points, the index was heading lower to test the previous low at 1,153 points while support was at 1,143.
On Bursa Malaysia, plantation counters saw some selling pressure.
Rubber glove companies dominated the gainers’ list yesterday. Adventa Bhd rose 16 sen to close at RM1.91 while Rubberex Corp (M) Bhd added 12 sen to RM1.82. Supermax Corp Bhd gained 9 sen to RM2.70, Latexx Partners Bhd was up 16 sen to RM2.09 and Top Glove Corp Bhd ended 6 sen higher at RM7.12.
Meanwhile, the Shanghai benchmark index rose 1.4%, Nikkei 225 was up 0.16%, Hang Seng Index gained 0.84% while Singapore’s Straits Times Index gained 0.75%.
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