Despite opening higher, the FBMKLCI gradually trended down and closed marginally lower at 1,769.63 (-3.53pt, -0.2%). Meanwhile, Asian equities were mixed, the yen and gold extended gains, and Treasuries rallied as traders digested reports of North Korean plans for a ballistic missile launch on the heels of Sunday’s nuclear test. The MSCI Asia Pacific Index fell 0.1% to 160.04. The FBMKLCI’s top gainers were Axiata Group (+2.4%), Petronas Chemicals Group (+2.0%) and Petronas Dagangan (+1.8%), while the top losers were CIMB Group Holdings (-4.5%), British American Tobacco (-1.6%) and Astro Malaysia Holdings (-1.5%). In the broader market, losers outpaced gainers 596 to 364 with 288 counters unchanged. Turnover was 2.53b shares valued at RM2.18b. The FBMKLCI started the day on a positive note, opening at 1,772.20, before succumbing to selling pressure to close in negative territory. Yesterday’s decline suggests selling pressure is still prevalent in the near term due to market jitters. The absence of domestic catalysts and the uncertainty in the global market suggest the likelihood of the index retesting the immediate support of 1,752 in the near term. This bearish movement is supported by the downtick in RSI and bearish crossover in the indicators MACD and DMI.

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

With the US markets closed on Monday for the Labour Day holiday, Tuesday marked the first regular trading since the geopolitical developments. Losses in the financials, basic materials and telecoms sectors led shares lower. At the close, the Dow Jones Industrial Average lost 1.1%, the S&P 500 index lost 0.8% and the NASDAQ Composite index declined 0.9%. Falling stocks outnumbered advancing ones on the New York Stock Exchange by 2,148 to 964, and 124 ended unchanged. On the Nasdaq Stock Exchange, 1,705 fell and 809 advanced, while 126 ended unchanged.

Source: UOB Kay Hian Research - 6 Sept 2017