The FBMKLCI dropped 1.65pt o close marginally lower at 1,738.95 yesterday on profit taking in selected blue chips. Meanwhile, Asian stocks were poised to decline after US equities fell, while the pound held on to gains triggered by shock news of a UK election and the yen closed at its strongest since Nov. 14. The FBMKLCI’s top gainers were Genting Bhd (+2.2%), Genting Malaysia (+1.6%) and IOI Corporation (+1.1%) while the top losers were Petronas Gas (-3.1%), Westports Holdings (-2.7%) and Hong Leong Financial Group (-1.0%). In the broader market, losers outpaced gainers 661 to 258 with 347 counters unchanged. Turnover was 2.85b shares valued at RM2.19b. From a technical perspective, the small-range movement yesterday did not yield significant findings which we can use for a new analysis. Given the indecisive nature of the “spinning top” pattern registered and flattish signal in the RSI, we remain adamant that the current consolidation is part of the natural normalisation process in each market. Given a lack of fresh catalysts, we expect the FBMKLCI to move within the range of 1,729 to 1,745 in the near term. However, the index continues to trade above the trendline, thus we opine that the upward movement should resume once selling pressure has eased. Support and resistance levels are as follows:

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

US stocks were mixed after the close on Wednesday, as gains in the healthcare, industrials and the consumer service sectors led shares higher while losses in the oil & gas, utilities and consumer goods sectors led shares lower. At the close in NYSE, the Dow Jones Industrial Average fell 0.58% to hit a new 1-month low, while the S&P 500 index fell 0.17%, and the NASDAQ Composite index climbed 0.23%. Weaker-thanexpected earnings from IBM and a slump in oil prices weighed on sentiment. Falling stocks outnumbered advancing ones on the NYSE by 1,714 to 1,497 and 37 ended unchanged

Source: UOB Kay Hian Research - 20 Apr 2017