The FBMKLCI declined 7.05pt to close at 1,760.03 yesterday, dragged down by selling pressure on index counters. Meanwhile, Asian shares turned positive on Monday, shrugging off a new North Korean missile test as investors turned their attention to a raft of global economic data and earnings this week, while the dollar crept up but remained capped by US political concerns. The FBMKLCI’s top gainers were Westports Holdings (+1.6%), Astro Malaysia Holdings (+1.6%) and Hap Seng Consolidated (+1.0%), while the top losers were CIMB Group Holdings (-1.4%), Public Bank (-1.3%) and Petronas Gas (-1.2%). In the broader market, losers outpaced gainers 586 to 309 with 348 counters unchanged. Turnover was 1.94b shares valued at RM2.58b. From a technical perspective, the FBMKLCI closed lower and formed a bearish candlestick pattern yesterday, suggesting weaker performance ahead. However, a negative follow-through needs to be established in order to confirm the selling trend. Nevertheless, overall reading of the index shows that the pullback could be temporary and further upside can be expected once selling pressure normalises. Support and resistance levels are as follows:

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

Wall Street closed at record highs on Monday, as market participants continued to expect upbeat corporate earnings that would underpin a move higher in market averages and offset the recent slump in tech stocks. The DJIA closed higher at 21,891.12. The S&P 500 closed 0.07% higher while the Nasdaq Composite closed at 6348.12, down 0.42%. Sentiment on corporates earnings remained bullish, after data from Factset on Friday showed that 73% of the S&P 500 companies that had reported earnings as of last week had beat estimates on both top- and bottom-lines. The National Association of Realtors said on Monday, pending home sales, or signed contracts to buy previously owned homes, rose 1.5% in June from the previous month.

Source: UOB Kay Hian Research - 1 Aug 2017