The FBMKLCI extended its decline for a second day to close at 1,777.77 (-0.17pt) yesterday. Meanwhile, Asian stocks reversed earlier gains as investors continued to take risks off the table even as American officials tried to ease concerns amid an escalation in tensions between the US and North Korea. The MSCI Asia Pacific Index fell 0.5% to 159.71. The FBMKLCI’s top gainers were AMMB Holdings (+2.3%), British American Tobacco (+1.9%) and Westports Holdings (+1.1%), while the top losers were RHB Bank (-1.0%), Genting Malaysia (-0.85%) and Genting Bhd (-0.72%). In the broader market, losers outpaced gainers 624 to 259 with 342 counters unchanged. Turnover was 1.35b shares valued at RM1.50b. From a technical perspective, the index movement was in line with our earlier expectation following a negative closing yesterday as investors locked in recent gains. Despite the current negative connotation, the long-term trend is still seeing a bullish bias. Thus we advocate a “buy on dip” strategy. Moving forward, another round of selling pressure looks set to take over with a potential retesting of the recent low at the 1,770 level. Support and resistance levels are revised as follows:

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

All three major US equity benchmarks finished sharply lower on Thursday for their worst day since mid-May, with the trifecta of indexes all tumbling for a third straight session for the first time since mid-April, amid a persistent war of words between the US and North Korea. At the close in NYSE, the DJIA declined 0.93%, while the S&P 500 index declined 1.45%, and the NASDAQ Composite index declined 2.13%. Falling stocks outnumbered advancing ones on the NYSE by 2,671 to 492, and 83 ended unchanged. On the Nasdaq SE, 1,990 fell and 530 advanced, while 107 ended unchanged.

Source: UOB Kay Hian Research - 11 Aug 2017