The FBMKLCI fell 3.46pt to close at 1,753.78 yesterday as investors approached the market cautiously in anticipation of the Federal Reserve’s meeting. Meanwhile, Asian equities extended gains, making it the longest winning streak since April after Federal Reserve Chair Janet Yellen signaled there will be no rush to tighten monetary policy. The MSCI Asia Pacific Index rose 0.7% to 156.35 as of 4:47pm in Hong Kong, set for its longest stretch of gains since April 27. The FBMKLCI’s top gainers were YTL Corporation (+1.4%), Genting Bhd (+1.3%) and AMMB Holdings (+1.2%), while the top losers were Axiata Group (-4.9%), DiGi.Com (-3.5%) and Hap Seng Consolidated (-1.7%). In the broader market, gainers outpaced losers 441 to 370 with 392 counters unchanged. Turnover was 1.74b shares valued at RM2.02b.

From the technical perspective, the FBMKLCI remained in a tight range. Despite the positive overnight US market, the index closed below the opening price, creating a “small black body” candle and was also unable to close above the “cloud”. Given declining buying interest, the FBMKLCI may consolidate lower on the back of uncertainties in the external market. For now, we expect the short-term trading range at 1,742-1,760 but the long-term outlook remains bullish. Support and resistance levels are as follows:

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

The Wall Street rose modestly on Thursday afternoon, helped by gains in financials ahead of profit reports from several big US banks Friday. At the close in NYSE, the DJIA added 0.10% to hit a new all-time high, while the S&P 500 index climbed 0.19%, and the NASDAQ Composite index added 0.21%. Rising stocks outnumbered declining ones on the New York Stock Exchange by 1,605 to 1,474 and 145 ended unchanged; on the Nasdaq Stock Exchange, 1,267 fell and 1,194 advanced, while 157 ended unchanged.

Source: UOB Kay Hian Research - 14 Jul 2017