The FBMKLCI added 0.13pt to close at 1,771.36 as support from selective buying in the market was negated by sustained selling pressure on blue chips. Meanwhile, Asian stocks rallied as financial shares across the region gained, tracking overnight increases in the US as comments from central bank officials renewed the risk appetite of investors.The MSCI Asia Pacific Index climbed 0.6% as of 5:10pm in Hong Kong, more than erasing a two-day slump. The FBMKLCI’s top gainers were IJM Corporation (+2.3%), Astro Malaysia Holdings (+1.5%) and MISC (+1.5%), while the top losers were Hong Leong Bank (-1.9%), YTL Corporation (-0.7%) and Axiata Group (-0.6%). In the broader market, gainers outpaced losers 502 to 314 with 386 counters unchanged. Turnover was 1.40b shares valued at RM1.56b.

From the technical perspective, the short-term outlook remains lacklustre, given the FBMKLCI is still trading within 1,770-1,790. A breach of either band may trigger further reaction. At the moment, the index has flashed minor weakness in the short term as the RSI is still trading below the threshold of 50pt, indicating selling pressure. Nevertheless, the outlook remains bullish over the medium and long term in view of strong support at 1,760, and the rising long-term trendline. We expect the index to recover gradually once selling pressure eases. Support and resistance levels are as follows:

• Support: 1,760,1,742
• Resistance: 1,800, 1,825

US stocks closed lower on Thursday, as large-cap technology stocks tumbled, offsetting gains in banking and energy stocks, while weaker-than-expected initial jobless claims data weighed on sentiment. At the close in NYSE, the DJIA declined 0.78%, while the S&P 500 index declined 0.86%, and the NASDAQ Composite index fell 1.44%. Falling stocks outnumbered advancing ones on the NYSE by 2,194 to 954 and 107 ended unchanged. On the Nasdaq Stock Exchange, 1,504 fell and 979 advanced, while 150 ended unchanged.

Source: UOB Kay Hian Research - 30 Jun 2017