Market starts off on firm note

KUALA LUMPUR: Blue chips kicked off the new week on Monday, Feb 22 on a firm note, in line with the positive key Asian markets on follow-through buying interest while Shanghai's markets reopened after a week-long break for the Chinese New Year.

At 10am, the FBM KLCI was up 6.09 points to 1,263.76. Turnover was 89.45 million shares valued at RM98 million. There were 231 gainers, 75 losers and 139 stocks unchanged.

Among key regional markets, Hong Kong's Hang Seng Index opened 2.6% higher at 20,407.84 while Japan's Nikkei 225 jumped 3.16% to 10,443.59. The Shanghai Composite Index added 0.26% to 3,025.96 and Singapore's Straits Times Index 0.49% higher at 2,770.56.

Petronas Dagangan and Supermax rose 18 sen each to RM8.76 and RM5.65 while Public Bank added 12 sen to RM11.22 and Dutch Lady and Tanjong gained 16 sen each to RM12.16 and RM17.82. Other gainers were Hai-O, up 11 sen to RM9.48 and PPB 10 sen to RM16.40.

MAS's entitlement to the renounceable rights, which cease trading on Tuesday, rose 0.5 sen to seven sen.

KFCH and BAT fell 10 sen each to RM7.90 and RM41.54 while DiGi gave up four sen to RM22.30.

HwangDBS Vickers Research said if follow-through buying interest returns to provide support, then the Malaysian bourse could have hit a short-term bottom already, though its immediate upside may be equally restricted.

It said the tigers wanted to lift share prices on the local stock market after ushering in the Lunar New Year but
were stopped short by external headwinds last week.

As a result, the benchmark FTSE Bursa Malaysia KLCI or FBM KLCI pulled back from a high of 1,264.91 to close at 1,257.67, a tiny increase from the preceding Friday's close of 1,253.39. Similarly, the FBM 70 Index (-0.2%) and the FBM ACE Index (flat) were little changed through the week.

"An abundance of domestic news flows will greet investors when they come back from their long holidays this week. These developments (and their implications) may then drive investors to either raise or reduce their market positions, even as talking points from abroad - like withdrawal of stimulus programs, monetary tightening and sovereign credit risks - will still influence the overall mood ahead," it said.

On the chart, HDBSVR said the FBM KLCI may sway sideways with a marginal negative bias for the time being. This could be inferred if a minor downward sloping pattern - which remains sketchy at this early stage - develops further.

Under this scenario, the bellwether is expected to reverse since it is now hovering at the upper part of the channel. If that is the case, then our first support line of 1,255 appears vulnerable. A drop below will probably send the benchmark index towards the next support level of 1,230.

However, given the prevalence of little panic selling thus far, it is tempting to say that the FBM KLCI could have bottomed already after bouncing up from its recent trough of 1,224.37 which it touched on Feb 9.

"On the other hand, its positive trend - which is still intact, in our view - is not likely to resume just yet until the index climbs beyond the first resistance mark of 1,280," it said.