The FBMKLCI plunged 13.84pt to close at 1,758.67 yesterday. Meanwhile, Asian stocks retreated, taking their cue from a subdued session on the Wall Street, while the dollar retained gains made after the Federal Reserve's hawkish policy statement. The MSCI Asia Pacific excluding Japan Index fell 0.3% to 487.44 as of 4:41pm in Hong Kong, with the materials group leading losses. The FBMKLCI’s top gainers were Westports Holdings (+1.0%), IOI Corporation (+0.9%) and KLCC Property Holdings (+0.8%), while the top losers were AMMB Holdings (-3.6%), Genting Malaysia (-1.7%) and RHB Bank (-1.6%). In the broader market, losers outpaced gainers 824 to 185, with 294 counters unchanged. Turnover was 3.45b shares valued at RM2.89b. The FBMKLCI sank lower yesterday and penetrated the previous immediate support of 1,760, placing a negative bias over the short term. Yesterday, the RSI line dipped, likely indicating further pressure on the index. In line with our earlier expectation, the correction should be far from over following weaker global equity performance. The violation of 1,760 may see the index slide towards the support level of 1,740, which would suggest a reversal rather than a normal correction. We advise investors to trim positions and lock in ytd gains. Support and resistance levels are revised as follows:

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

The S&P 500 and the Nasdaq rose on Thursday while the Dow slipped in range-bound trading as weak energy shares were offset by relief over the passage of a revised health care bill. Energy stocks were the biggest losers as oil prices fell to their lowest since November. However, optimism over easing of legislative gridlock helped digest selling pressure after House Republicans secured enough support to pass the American Health Care Act, which would repeal and replace Obamacare. The S&P 500 SPX edged up 1pt to close at 2,389 and the Dow Jones Industrial Average slipped 6pt to 20,951. The Nasdaq Composite Index rose 2pt to close at 6,075.

Source: UOB Kay Hian Research - 5 May 2017