The FBMKLCI rebounded by 2.35pt (+0.1%) to close at 1,757.27 yesterday. Meanwhile, Asian equities rose to the highest level in almost 10 years as the euro weakened and US dollar remained near its one-year low on hopes the European Central Bank and Bank of Japan will keep policies supportive amid concerns over the pace of reforms in the US. The MSCI Asia Pacific Index rose for an eighth straight day, adding 0.3% to 158.64.The FBMKLCI’s top gainers were CIMB Group Holdings (+1.4%), British American Tobacco (+1.4%) and Genting Malaysia (+1.2%), while the top losers were AMMB Holdings (-1.8%), Genting Bhd (-1.2%) and Telekom Malaysia (-0.9%). In the broader market, gainers outpaced losers 460 to 391 with 387 counters unchanged. Turnover was 2.17b shares valued at RM2.29b. The FBMKLCI is trading within a tight range but managed to make a technical rebound yesterday after a few consecutive days of losses. We expect the index to trade sideways as the RSI indicator suggests flattish momentum. We are likely to see another tight move from the index within our expected 1,750-1,770. If the index fails to stay at above this level, the next support levels are at 1,752 and 1,742. The support and resistance levels are as follows:

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

The Nasdaq Composite and the S&P 500 hit record highs on Wednesday, powered by technology stocks and a >20% jump in Vertex Pharmaceuticals, while gains on the Dow were capped by a sharp drop in IBM shares. At the close in NYSE, the DJIA rose 0.31%, while the S&P 500 index gained 0.54%, and the NASDAQ Composite index gained 0.64%. Rising stocks outnumbered declining ones on the New York Stock Exchange by 2,271 to 849 and 135 ended unchanged. On the Nasdaq Stock Exchange, 1,627 rose and 862 declined, while 149 ended unchanged.

Source: UOB Kay Hian Research - 20 Jul 2017