The FBMKLCI rose 2.56pt to close at 1,775.50 yesterday as bargain hunting in indexlinked stocks pared earlier losses. Meanwhile, Asian stocks and the dollar edged up on Thursday, shaking off the risk aversion that gripped financial markets overnight after President Donald Trump threatened to shut down the US government and end the North American Free Trade Agreement. The MSCI Asia Pacific Index fell less than 0.1% to 159.95. The FBMKLCI’s top gainers were IOI Corporation (+3.1%), IJM Corporation (+3.0%) and KLCC Property Holdings (+1.5%), while the top losers were AMMB Holdings (-1.5%), Hong Leong Financial Group (-1.0%) and Sime Darby (-0.8%). In the broader market, gainers outpaced losers 433 to 414 with 366 counters unchanged. Turnover was 2.13b shares valued at RM1.98b. The FBMKLCI opened lower in the earlier part of yesterday, but managed to close in positive territory amid bargain-hunting in selected index-linked counters. From a technical perspective, the FBMKLCI remains consolidated amid a lack of fresh buying interest as the index is likely to move sideways in the near term. However, we maintain our long-term bullish outlook as the FBMKLCI is still trading above the trendline. Nevertheless, an upward recovery remains on the cards despite the current tepid movements. Thus we expect the index to test the recent high of 1,783 once the selling pressure has eased. The support and resistance levels are as follows:

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

US stocks were lower after the close on Thursday, as losses in the consumer services; consumer goods and telecoms sectors led shares lower. At the close in NYSE, the DJIA declined 0.13%, while the S&P 500 index lost 0.21%, and the NASDAQ Composite index declined 0.11%. Rising stocks outnumbered declining ones on the New York Stock Exchange by 1,551 to 1,501 and 184 ended unchanged; on the Nasdaq Stock Exchange, 1,496 rose and 956 declined, while 171 ended unchanged.

Source: UOB Kay Hian Research - 25 Aug 2017