The FBMKLCI closed marginally higher yesterday after rising 3.84pt to settle at 1,771.01. Meanwhile, most Asian stocks gained as Chinese equities erased earlier losses triggered by Moody’s Investors Service’s rating cut of the nation’s debt, and a weaker yen buoyed Japan’s shares. The MSCI Asia Pacific Index was little changed at 151.87 as of 4:40pm in Hong Kong, with two shares gaining for each one that fell. The FBMKLCI’s top gainers were CIMB Group Holdings (+2.3%), RHB Bank (+1.9%) and British American Tobacco (+1.8%), while the top losers were Westports Holdings (-3.41%), IHH Healthcare (-2.2%) and Hong Leong Financial Group (-1.9%). In the broader market, losers outpaced gainers 546 to 419 with 356 counters unchanged. Turnover was 3.38b shares valued at RM2.90b. The FBMKLCI has rebounded off the rising channel trendline as the index rose 3.84pt to close at 1,771.01 yesterday. The index also rebounded from the 21-day SMA, thus keeping the short-term trend bullish despite the recent pullback. An uptick in the RSI signals a recovery in buying interest and this could put the FBMKLCI back on an uptrend. Barring any external wobbles and woes, we expect the index to go in sideway mode afterward based on the spinning top pattern in yesterday’s movement. Support and resistance levels are maintained as follows:

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

US stocks ended up slightly on Wednesday, with the S&P 500 hitting a record high close, after minutes of the Federal Reserve's latest meeting showed policymakers view a rate hike is coming soon. The DJIA was up 74.51pts, or 0.36%, to 21,012.42, the S&P 500 Index gained 5.97 pts, or 0.25%, to 2,404.39 and the Nasdaq Composite added 24.31 pts, or 0.40%, to 6,163.02. Advancing issues outnumbered declining ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favoured advancers.

Source: UOB Kay Hian Research - 25 May 2017