The FBMKLCI closed marginally lower yesterday, sliding 0.27pt to 1,754.92 amid selling pressure and bargain-hunting across the board. Meanwhile, Asian equities rose, erasing earlier declines, as shares of software companies and chip makers gained on hopes that a weaker US dollar may improve their outlook for earnings. The MSCI Asia Pacific Index rose for a seventh day in a row, adding 0.1% to 157.82 as of 4:38pm in Hong Kong, heading toward its longest winning streak since March.The FBMKLCI’s top gainers were DiGi.Com (+0.9%), CIMB Group Holdings (+0.8%) and Astro Malaysia Holdings (+0.8%), while the top losers were YTL Corporation (-1.4%), British American Tobacco (-1.3%) and Genting Bhd (-0.9%). In the broader market, gainers outpaced losers 457 to 385 with 381 counters unchanged. Turnover was 2.16b shares valued at RM2.22b. Given the current negative connotation, the index is likely to slide further as investors are likely to trim their positions due to the extended weekend. A breach of the immediate support of 1,752 is likely to send the index towards the previous low of 1,742. This bearish movement is supported by the downtick in the RSI and a bearish crossover in both the MACD and the DMI. Nevertheless, we maintain our long-term bullish view as we see the current jitters as a normal correction. Support and resistance levels are as follows:

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

US stocks were mixed after the close on Tuesday, as gains in the technology, utilities and consumer services sectors led shares higher while losses in the telecoms, oil & gas and basic materials sectors led shares lower. At the close in NYSE, the DJIA declined 0.25%, while the S&P 500 index climbed 0.06%, and the NASDAQ Composite index gained 0.47%. Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1,621 to 1,467 and 162 ended unchanged. On the Nasdaq Stock Exchange, 1,433 fell and 1,036 advanced, while 162 ended unchanged.

Source: UOB Kay Hian Research - 19 Jul 2017