The FBMKLCI extended its rebound by 15.67pt to close at 1,675.49 last Friday, buoyed by gains in index-linked counters. Meanwhile, Asian stocks were mixed ahead of the US monthly jobs report. The MSCI Asia Pacific Index slipped 0.2%. The FBMKLCI’s top gainers were Axiata Group (+6.0%), Telekom Malaysia (+3.3%) and RHB Bank (+2.7%) while the top losers were Westports Holdings (-1.2%) MISC (-0.8%) and KLCC Property (-0.26%). In the broader market, gainers outpaced losers 442 to 403 with 352 counters unchanged. Turnover was 1.97b shares valued at RM1.95b. Technically, the index recorded another gain for the third consecutive day last Friday. The RSI line also crossed the 50pt threshold, suggesting an increase in buying interest. However, given uncertainties on the external front, we recommend a cautious approach in the market. Profit-taking may kick in sooner amid the recent gains. While our mediumterm outlook remains neutral, we are optimistic for the long term, given that the index has remained steady above our trendline. Support and resistance are as follows:

• Support: 1,647,1,630
• Resistance: 1,680,1,700

US stocks on Friday notched new closing records following a solid jobs report as the DJIA came within a fraction of breaching the 20,000 mark. The DJIA gained 0.32%, to settle at 19,963.80 and the S&P500 edged higher by 0.35%, to 2,276.98. NASDAQ Composite index added 0.6% to settle at 5,521.06. According to the Bureau of Labor Statistics, December's monthly non-farm payroll reported below expectations with 156,000 new jobs. The US unemployment rate rose 10bp to 4.7%. Falling stocks outnumbered advancing ones on the NYSE by 1,733 to 1,490 and 38 ended unchanged. On the Nasdaq SE, 1,351 fell and 1,140 advanced, while 131 ended unchanged.

Source: UOB Kay Hian Research - 9 Jan 2017