The FBMKLCI reversed earlier losses to close 0.45pt higher at 1,765.34 yesterday following late buying in index-linked counters. Meanwhile, Asian equities fell in thin trading and the euro slipped after Mario Draghi’s dovish message to the European Parliament,

and as investors assessed the path for higher US borrowing costs. The FBMKLCI’s top gainers were IHH Healthcare (+4.4%), Westports Holdings (+4.3%) and Genting Bhd (+1.7%), while the top losers were Genting Malaysia (-5.8%), AMMB Holdings (-1.9%) and CIMB Group Holdings (-1.3%). In the broader market, losers outpaced gainers 680 to 235 with 348 counters unchanged. Turnover was 2.61b shares valued at RM2.16b. Despite earlier selling pressure, buying interest in the last trading hour managed to reverse earlier losses, thus placing the FBMKLCI in positive territory yesterday. However, yesterday’s FBMKLCI could instil weakness in the near term, particularly as the RSI line has dipped lower upon reaching 50pt line. Given the downtick, selling pressure may accelerate in the near term, thus dragging down the index. Initial support may be seen around the 1,755 with the next support at 1,729. However, a follow-through needs to be established to confirm further pullback. Support and resistance levels are as follows:

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

US stocks closed mostly lower on Tuesday, as investors considered the prospect of a rebound in second-quarter economic growth amid the release of mixed economic data, while a surge in tech stocks capped losses. The DJIA closed down at 21,029.47 down 0.24%. The S&P 500 closed roughly flat while the Nasdaq Composite closed at 6,203.19, down 0.11%.

Source: UOB Kay Hian Research - 31 May 2017