The FBMKLCI advanced 4.21pt to close at 1,749.41 yesterday. Meanwhile, Asian shares extended gains from a 21-month high, while the world’s biggest coal miner soared after posting its first profit in four years and pledging to pay a special dividend. The MSCI Asia Pacific Ex-Japan Index gained 0.4%. The FBMKLCI’s top gainers were Axiata Group (+2.2%), Hap Seng Consolidated (+1.5%) and AMMB Holdings (+1.4%) while the top losers were Westports Holdings (-1.5%), KLCC Property Holdings (-1.4%) and Petronas Dagangan (-0.59%). In the broader market, gainers outpaced losers 546 to 421 with 356 counters unchanged. Turnover was 6.02b shares valued at RM3.02b. From a technical perspective, despite closing in positive territory and penetrating the previous immediate resistance of 1,745, the FBMKLCI formed a “high wave” candlestick pattern yesterday, implying uncertainty in the current trend. Given the steep gain of 23pt over the last few days, profit-taking could kick in and leave the index vulnerable to a minor pullback. However, the overall trend remains on the upside, thus we expect a retest of the immediate resistance of 1,760 soon once selling pressure eases. We revise our support and resistance levels as follows:

• Support: 1,729,1,713
• Resistance: 1,760, 1,787

The main US stock indices closed marginally lower on Monday for the third straight day of losses as investors were reluctant to make big bets without major economic or corporate news. The DJIA fell 0.04% to settle at 20,905.86 and the S&P500 edged lower by 0.2% to 2,373.47. The NASDAQ Composite index was flat at 5,901.53. Charles Evans, president of Chicago Fed, said in an interview that he would support three rate hikes this year if economic improvement persists, and four increases if inflation accelerates above the central bank’s 2% target. Falling stocks outnumbered advancing ones on the NSYE by 1,853 to 1,345, and 53 ended unchanged. On the Nasdaq SE, 1,559 fell and 959 advanced, while 104 ended unchanged.

Source: UOB Kay Hian Research - 21 Mar 2017