The FBMKLCI surrendered 2.10pt to close at 1,755.03 yesterday. Meanwhile, Asian stocks rose as technology shares led the advance for a second day ahead of comments later this week by US Federal Reserve Chair Janet Yellen and earnings from some of the biggest companies in the world’s largest economy. The MSCI Asia Pacific Index added 0.7% to 154.40, extending its year-to-date advance to 14%, as all industry groups gained.The FBMKLCI’s top gainers were Petronas Chemicals Group (+1.5%), IHH Healthcare (+1.2%) and British American Tobacco (+1.2%), while the top losers were CIMB Group Holdings (-2.1%), IJM Corporation (-1.4%) and Axiata Group (-1.1%). In the broader market, losers outpaced gainers 715 to 198 with 345 counters unchanged. Turnover was 1.73b shares valued at RM2.07b.

From the technical perspective, the index formed another “spinning top” pattern yesterday as selling pressure has been absorbed. The RSI line is treading at oversold levels, which likely indicates further pressure on the index. Despite a shaky short-term outlook, we remain optimistic for the index to recover once selling pressure normalises. For now, we expect sideways movement ahead with the benchmark index likely to consolidate further. Support and resistance levels were as follows:

• Support: 1,752,1,742
• Resistance: 1,787, 1,800

US stocks ended little changed on Tuesday in a session marked by knee-jerk reactions to events in Washington that drove investors to first worry then hope about prospects for the Trump administration's economic agenda. At the close in NYSE, the Dow Jones Industrial Average was flat, the S&P 500 index lost 0.1% and the NASDAQ Composite index added 0.3%. Rising stocks outnumbered declining ones on the New York Stock Exchange by 1,641 to 1,445, and 149 ended unchanged. On the Nasdaq Stock Exchange, 1,274 rose and 1,196 declined, while 155 ended unchanged.

Source: UOB Kay Hian Research - 12 Jul 2017