The FBMKLCI added 0.19pt to close at 1,755.19 yesterday. Meanwhile, Asian stocks hit a two-year high on Monday, boosted by stronger-than-expected economic growth in China and bets that lackluster US data will keep the Federal Reserve cautious about the pace of policy tightening. The MSCI Asia Pacific Index ex-Japan rose for a sixth straight session, adding 0.3% to 519.85 as of 4:30pm in Hong Kong, set for its longest winning streak since March. The FBMKLCI’s top gainers were DiGi.Com (+1.5%), British American Tobacco (+1.5%) and PPB Group (+1.1%), while the top losers were Astro Malaysia Holdings (-1.2%), KLCC Property Holdings (-1.0%) and IHH Healthcare (-1.0%). In the broader market, losers outpaced gainers 441 to 417 with 371 counters unchanged. Turnover was 2.04b shares valued at RM1.72b.

From the technical perspective, the positive gain yesterday still failed to reignite an upward trend. Despite treading in positive territory, the index has closed below both the 7- day and 21-day EMA lines, implying downward pressure ahead. The DMI reading remained on the downside as buying momentum has weakened in the past few weeks. Going forward, we expect further downward consolidation on a lack of catalysts. Support and resistance levels are as follows:

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

US stocks closed roughly flat on Monday, as investors looked ahead to a raft of corporate earnings reports slated for later this week. At the close in NYSE, the DJIA declined 0.04%, while the S&P 500 index lost 0.01%, and the NASDAQ Composite index climbed 0.03%. Rising stocks outnumbered declining ones on the New York Stock Exchange by 1,727 to 1,372 with 147 ending unchanged. On the Nasdaq Stock Exchange, 1,283 rose and 1,178 declined, while 162 ended unchanged.

Source: UOB Kay Hian Research - 18 Jul 2017