The FBMKLCI added 6.67pt yesterday to close at 1,774.95 amid bargain-hunting across the board in tandem with regional performance. Meanwhile, Asian stocks rebounded after last week’s upheaval, as a rally in energy and commodity producers sent the regional benchmark back near the highest level in two years. The MSCI Asia Pacific Index advanced 0.8% to 151.93. The FBMKLCI’s top gainers were Petronas Gas (+4.2%), Genting Malaysia (+3.3%) and IJM Corporation (+1.7%), while the top losers were British American Tobacco (-1.7%), Genting Bhd (-1.5%) and IHH Healthcare (-0.50%). In the broader market, gainers outpaced losers 542 to 420, with 374 counters unchanged. Turnover was 4.10b shares valued at RM2.95b. From a technical viewpoint, the FBMKLCI has rebounded from last week’s pullback to return to its bullish course. Despite yesterday’s surge, the current consolidation has not yet ended, thus we are likely to see further ranging movement within 1,755-1,780 in the near term. However, a positive follow-through above 1,780 needs to be established to spur further buying interest which may translate into a further rise toward the previous high of 1,787. We maintain our support and resistance levels as follows:

• Support: 1,755,1,729
• Resistance: 1,787, 1,800

US stocks closed higher on Monday, as investors shrugged off recent US political turmoil, shifting attention to President Donald Trump’s first trip abroad since taking office, after he signed a nearly US$110b weapons deal with Saudi Arabia. Gains in the technology, utilities and industrials sectors led shares higher. At the close in NYSE, the DJIA rose 0.43%, while the S&P 500 index gained 0.52%, and the NASDAQ Composite index added 0.82%. Rising stocks outnumbered declining ones on the NYSE by 2,158 to 1,057 and 49 ended unchanged. On the Nasdaq SE, 1,616 rose and 884 declined, while 110 ended unchanged.

Source: UOB Kay Hian Research - 23 May 2017