The Borneo Post

Market remains directionl­ess

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After a rebound two weeks ago from a bearish trend that started at the beginning of March, the market was directionl­ess last week. The failure to rally after the rebound two weeks ago indicate a weak market sentiment.

The market is worried about the economy. The latest news was that Malaysian exports fell for the second month, declining 0.5 per cent to RM84 billion in March 2019 from a year earlier.

The FBM KLCI declined only 0.1 per cent in a week to 1637.30 points.

The market was short of a trading day last week due to the labour day holiday last Wednesday.

The average daily trading volume has fallen to 2.7 billion shares last week from 4.1 billion shares the week before.

The average daily trading value rose to RM2 billion from RM3 billion.

Weaker ringgit and weak economic data cause foreign investors to continue selling. Net sell from foreign institutio­ns was RM 275.7 million.

Net buys from local institutio­ns and retail were RM255.3 million and RM20.4 million respective­ly.

In the FBM KLCI, decliners out-paced gainers 16 to 13. The top three gainers were Malaysia Airports Holdings Bhd (1.4 per cent in a week to RM7.60), Westports Holdings Bhd (1.3 per cent to RM3.84) and Tenaga Nasional Bhd (1.3 per cent to RM12.30).

The top three decliners were Press Metal Aluminium Holdings Bhd (3.2 per cent to RM4.60), Maxis Bhd (2.2 per cent to RM5.32) and Petronas Chemicals Group Bhd (1.7 per cent to RM8.95).

Global market indices performanc­es were mixed last week. In Asia, Japan market was closed due to holiday last week and the rest of the markets closed marginally higher and lower. European markets were mixed while the US market closed marginally lower.

After weeks of strengthen­ing, the US dollar weakened against major currencies last week. The US dollar index fell to 97.5 points last Friday from 98.1 points in the previous week. The Malaysian

ringgit weakened to RM4.14 per US dollar as compared to RM4.13 per dollar in the previous week.

Commoditie­s prices closed marginally lower as well. COMEX gold futures fell 0.6 per cent in a week to US$1,280.20 an ounce last Friday. Crude oil (Brent) fell 1.1 per cent to US$70.78 per barrel. Crude palm oil (BMD) declined 5.3 per cent in a week to RM2,007 per metric ton, the lowest in nearly six months on expectatio­ns that inventory levels may remain high.

The market was directionl­ess last week. The immediate support and resistance levels remained at 1,630 and 1,650 points respective­ly.

The market may remain directionl­ess if the index continues to stay between these levels.

The failure to overcome the immediate resistance level at 1,650 points indicates a weak market sentiment.

The FBM KLCI remained technicall­y bearish below both the short-term and long-term 30- and 200-day moving averages.

The index is also below the Ichimoku Cloud indicator and the Cloud is expanding downwards.

However, the bearish momentum is weak. The RSI and Momentum Oscillator were flat in the past one week and below their mid-levels. The MACD indicator is above its moving average and this also indicates a weak bearish trend.

The market is expected to remain uncertain if the index continues to stay between the immediate support level at 1,610 and resistance at 1,650 points. The index is currently in the middle of these two levels.

With a lack of catalysts, the market may turn bearish but the bullish markets performanc­es globally supported the market from falling even lower. Henceforth, we expect the market to remain directionl­ess this week.

 ??  ?? Daily FBM KLCI chart as at May 3, 2019 Global markets indices and commoditie­s performanc­es as at May 3:
Daily FBM KLCI chart as at May 3, 2019 Global markets indices and commoditie­s performanc­es as at May 3:
 ??  ?? By Benny Lee
By Benny Lee
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