The FBMKLCI rose 6.08pt to close at 1,768.16 yesterday amid a technical rebound. Meanwhile, Asian stocks climbed as demand for haven assets ebbed even while geopolitical concerns remained in the wake of North Korea’s missile launch. The MSCI AC Asia Pacific Index rose 0.2% to 153.97 as of 4:30pm in Hong Kong, reversing an earlier drop of the same magnitude. The FBMKLCI’s top gainers were Hong Leong Bank (+3.6%), Astro Malaysia Holdings (+2.4%) and AMMB Holdings (+2.2%), while the top losers were British American Tobacco (-0.7%), Petronas Chemicals Group (-0.4%) and Telekom Malaysia (-0.3%). In the broader market, gainers outpaced losers 422 to 389 with 407 counters unchanged. Turnover was 1.49b shares valued at RM1.69b. From a technical perspective, the FBMKLCI has shown signs of a recovery following the recent sell-down. However, we expect the technical rebound to be temporary as the index is trading inside the Ichimoku cloud which indicates sideway movements. The RSI line remains below 50pt, indicating selling pressure is still strong. Given that the regional markets were in positive territory for the past few days, we expect a spillover of positive sentiment to lead to a possible technical rebound in the FBMKLCI. For the long term, we maintain our bullish view as long as the FBMKLCI remains above the support and the uptrend lines. Support and resistance levels are as follows:

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

The Nasdaq and S&P500 finished higher while the Dow industrials closed fractionally lower Wednesday as Federal Reserve policy meeting minutes indicated a reduction in the central bank’s economy-boosting balance sheet could begin soon. At the close in NYSE, the DJIA declined 0.01%, while the S&P500 index gained 0.15%, and the NASDAQ Composite index gained 0.67%.close. Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1,946 to 1,174 and 128 ended unchanged; on the Nasdaq Stock Exchange, 1,419 fell and 1,074 advanced, while 148 ended unchanged.

Source: UOB Kay Hian Research - 6 Jul 2017