The FBMKLCI rose 9.75pt to close at 1,765.80 yesterday as index-linked counters rebounded strongly, buoyed by positive sentiment in the overnight US market. Meanwhile, the global rally picked up speed as Chinese shares steadied after a sell-off and North Korean artillery drills did little to ruffle financial markets. The MSCI Asia Pacific Index was up 0.8%. The FBMKLCI’s top gainers were AMMB Holdings (+5.4%), CIMB Group Holdings (+2.5%) and KLCC Property Holdings (+1.9%) while the top losers were British American Tobacco (-1.7%), Astro Malaysia Holdings (-1.1%) and Malayan Banking (-0.32%). In the broader market, gainers outpaced losers 559 to 388 with 377 counters unchanged. Turnover was 3.66b shares valued at RM3.11b. A positive follow-through from the previous gain has placed the FBMKLCI above the BBI line, indicating a further rise ahead. Despite trading within the expected range of 1,729- 1,759, the index indicates a positive recovery, with the violation of the previous immediate resistance of 1,760 likely if the current momentum persists. However, given the lack of domestic catalysts, external factors may have more weightage. Thus, FBMKLCI may be vulnerable to negative sentiments regionally. Nevertheless, we remain upbeat on the overall long-term prospect of the index. Support and resistance levels are revised as follows:

• Support: 1,740,1,729
• Resistance: 1,787, 1,800

The US stock market extended its rally on Tuesday, with the Dow jumping by triple-digits and the Nasdaq closing above 6,000 for the first time ever, as investors welcomed upbeat earnings and the possibility of corporate tax cuts. The DJIA rose 232.23pt, or 1.1%, to end at 20,996.12 after five of its components reported quarterly results, with four of them coming in ahead of forecasts. The broader S&P 500 was up 14.46pt, or 0.6%, to finish at 2,388.61. Materials and energy led the gains. The rally left the Dow 0.6% below its alltime closing high set March 1, while the S&P 500 ended just 0.3% off its record close from the same date. The Nasdaq Composite Index rose 41.67pt, or 0.7%, to close at a record 6,025.49, moving past the psychologically important milestone of 6,000 without much resistance.

Source: UOB Kay Hian Research - 26 Apr 2017