KUALA LUMPUR: Corporate earnings are expected to lead trading activity in February after a lull in January owing to the Lunar New Year festive period.
According to Kenanga Research, February is statistically favourable for the domestic market as it chalked up gains in seven of the lat 10 years, inclulding the two most recent years, to register an average monthly return of 1% since 2013.
However, the research firm said technical signals suggest the FBM KLCI may be seen backing away from the 1,500 level after failing to break out of the pyschological resistance in the previous week.
"On the chart, after tiptoeing around the 1,500-level, the FBM KLCI may back off from the psychological mark in view of the bearish technical signals triggered by the bellwether’s ongoing adjustment from the upper Bollinger Band and the stochastic indicator’s overdue reversal from an overbought position as the Parabolic SAR has shifted downward.
"Hence, the FBM KLCI could swing with a negative bias towards our immediate support threshold of 1,475. Our first resistance hurdle to obstruct any further advancement of the key market barometer still stands at 1,510," it said in its weekly technical review.
The research firm noted active news flow for the coming week including the debut of contractor Vestland on the ACE Market of Bursa Malaysia tomorrow, as well as the expected earnings announcements of Sunway REIT, Bursa Malaysia, CTOS Digital, Pavilion REIT, KLCC REIT and F&N Holdings.
At the open on Monday, the FBM KLCI was up 2.2 points to 1,499.75 as it tracked last Friday's positive performance on Wall Street.
The benchmark index is making another attempt to convincingly cross the 1,500-point hurdle even investors await more leads from the coming corporate earnings period.
Market breadth on Bursa Malaysia was positive with 217 gainers compared with 117 decliners, indicating a generally positive sentiment.
Among the early gainers were Hextar Technologies up 20 sen to RM28.82, Hong Leong Bank adding 12 sen to RM20.92 and Sime Darby Plantation rising five sne to RM4.33.
Consumer retail counters remained in focus in anticipation of their fourth-quarter earnings results, including from Nestle rising 40 sen to RM135.60, Heineken Malaysia gaining 30 sen to RM27.80, British American Tobacco adding eight sen to RM12.38 and Bonia climbing four sen to RM2.61.
Most active stocks were Borneo Oil up 0.5 sen to two sen, Nylex rising four sen to 58.5 sen and DGB unchanged at 1.5 sen.