The FBMKLCI declined 7.81pt yesterday and closed at 1,619.12 amid mild selling pressure on selected blue chips despite the regional index moving in the opposite direction. Meanwhile, shares in telecommunications services providers were the biggest gainers in the region, rising 0.8% as a group, followed by technology stocks, while materials companies slid 1.2%. The MSCI Asia Pacific Index added 0.2% as Singapore’s benchmark gauge climbed for a seventh day, rising 0.7%. The FBMKLCI’s top losers were YTL Corporation (-3.4%), Axiata Group (-3.0%) and Sime Darby (-2.3%) while the top gainers were RHB Bank (+5.4%), IHH Healthcare (+3.0%) and SapuraKencana Petroleum (+2.1%). In the broader market, losers outpaced gainers 526 to 276 with 315 counters unchanged. Turnover was 1.88b shares valued at RM3.23b.

From the technical perspective, the short-term outlook remained lacklustre as expected, given the FBMKLCI was still trading within 1,620-1,630 yesterday. Violation of either the lower or upper band may trigger further reaction. At the moment, the index has flashed minor weakness in the short term as the RSI is still trading below the threshold of 50pt, indicating the presence of selling pressure. We expect the index to recover gradually once selling pressure eases. Support and resistance levels are as follows:

• Support: 1,612,1,600
• Resistance: 1,645, 1,665

US stocks on Wednesday closed mixed. Gains in the oil & gas, basic materials and financials sectors led shares higher while losses in the utilities, telecoms and consumer goods sectors led shares lower. The DJIA gained 1.98pt, or 0.01%, to close at 19,123.58 while the S&P500 edged lower by 5.85pt, or 0.27%, to close at 2,198.81. Oil prices rose by nearly 9% on Wednesday after the OPEC agreed to cut production. US banks also rose sharply after President-elect’s pick for treasury secretary, Steven Mnuchin, said that the US interest rates would rise. Falling stocks outnumbered advancing ones on the NYSE by 1,887 to 1,268 and 85 ended unchanged

Source: UOB Kay Hian Research - 1 Dec 2016