The FBMKLCI sank 2.76pt to close at 1,763.11 yesterday as weaker sentiment in the overnight US market dragged index-linked counters lower. Meanwhile, Asian equities were mixed, with Japanese equities climbing while Chinese stocks slipped, as investors weighed economic data and the possible path for interest rates. The MSCI Asia Pacific Index gained 0.3% to 153.19. The FBMKLCI’s top gainers were Astro Malaysia Holdings (+2.4%), Genting Malaysia (+2.1%) and IHH Healthcare (+1.9%), while the top losers were Westports Holdings (-5.2%), Axiata Group (-4.5%) and IOI Corporation (-2.2%). In the broader market, losers outpaced gainers 505 to 414 with 336 counters unchanged. Turnover was 2.22b shares valued at RM2.24b.

From the technical perspective, the outlook for the FBMKLCI remains timid as a lack of catalysts pared down earlier gains. The index formed another “spinning top” pattern yesterday as the selling pressure has been absorbed. Despite a shaky short-term outlook, we remain optimistic for the index to recover once the selling pressure normalises. For now, we expect sideways movement ahead with the benchmark index likely to consolidate further. Support and resistance levels are as follows:

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

US stocks made a winning start to the month on Thursday, as investors look ahead to the release of the monthly jobs report, after the pace of private sector jobs growth surged in May and with manufacturing activity having topped market expectations. The DJIA notched up 135pts to close at 21,144.18. The S&P 500 closed 0.76% higher while the Nasdaq Composite closed at 6246.83, up 0.78%. Rising stocks outnumbered declining ones on the NYSE by 2,562 to 663 and 33 ended unchanged.

Source: UOB Kay Hian Research - 2 Jun 2017