The FBMKLCI rose 2.66pt to close at 1,741.61 yesterday. Meanwhile, stocks were mixed as investors assessed the strength of the global economy and geopolitical risks before the weekend’s French election. The MSCI Asia Pacific Index gained 0.3%.The FBMKLCI’s top gainers were RHB Bank (+3.1%), AMMB Holdings (+2.0%) and Astro Malaysia Holdings (+1.9%) while the top losers were Petronas Gas (-1.9%), Genting Malaysia (-1.1%) and Petronas Chemicals Group (-0.79%). In the broader market, gainers outpaced losers 498 to 368 with 395 counters unchanged. Turnover was 2.64b shares valued at RM2.24b. From a technical viewpoint, the FBMKLCI whipsaw movement yesterday posed an uncertain outlook despite the index closing above both the 7-day and 21-day EMA lines. Given the earlier mixed connotation, the FBMKLCI remains unperturbed by a lack of domestically-driven catalysts as selling pressure has been gradually absorbed in the past few days. A positive follow-through from this level would place the index back on its bullish course and is consistent with the growing momentum as shown by an uptick in RSI. Moving forward, we expect mild consolidation within the 1,729-1,745 region with an upper breakout in the cards once selling pressure has fully normalised. Support and resistance levels are as follows:

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

US stocks were higher after the close on Thursday, as gains in the financials, industrials and basic materials sectors led shares higher. Risk-on sentiment returned after a strong batch of corporate earnings and bullish comments on tax reform from U.S. Treasury Secretary Steven Mnuchin. At the close in NYSE, the Dow Jones Industrial Average gained 0.85%, while the S&P 500 index climbed 0.76%, and the NASDAQ Composite index added 0.92%. Rising stocks outnumbered declining ones on the NYSE by 2,209 to 999 and 40 ended unchanged.

Source: UOB Kay Hian Research - 21 Apr 2017