The FBMKLCI continued to rise by 6.67pt to close at 1,740.60 yesterday, buoyed by positive sentiment in the overnight US market as index-linked counters rebounded strongly. Meanwhile, global equities fell, with shares in Australia and London retreating as a sell-off in iron ore pulled down commodity producers. The MSCI Asia Pacific Index dropped 0.5%. The FBMKLCI’s top gainers were Genting Bhd (+2.5%), Genting Malaysia (+1.1%) and AMMB Holdings (+1.0%) while only one stock fell - YTL Corporation (-0.7%). In the broader market, gainers outpaced losers 552 to 327 with 397 counters unchanged. Turnover was 2.79b shares valued at RM2.45b. In line with our expectation, the FBMKLCI bucked regional sentiments and rose higher yesterday, culminating in a negative bias which has been lurking over the index in the past few days. The bullish crossover in the DMI suggests buying pressure has started to gain traction, which could lead to further upside in the near term. Although the negative bias in the short term has fully normalised, we maintain our long-term bullish bias. Support and resistance levels are maintained as follows:

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

US equities closed lower on Tuesday as losses in the Oil & Gas, healthcare and financials sectors led shares lower. The flight to safety trade continued on Wall Street, as investors mulled over geopolitical tensions in North Korea, Syria and Russia while UK Prime Minister Theresa May surprised the markets, after she announced her decision to call an early election. At the close in NYSE, the Dow Jones Industrial Average fell 0.55%, while the S&P 500 index lost 0.29%, and the NASDAQ Composite index declined 0.12%. Falling stocks outnumbered advancing ones on the NYSE by 1674 to 1515 and 53 ended unchanged. On the Nasdaq Stock Exchange, 1403 fell and 1085 advanced, while 131 ended unchanged

Source: UOB Kay Hian Research - 19 Apr 2017