The FBMKLCI rose 7.12pt to close at 1,789.86 yesterday, buoyed by positive sentiment in overnight US markets. Meanwhile, Asian equities took another leg higher after the S&P 500 Index rose to a record high and Treasuries tumbled, with less damage than originally feared from Hurricane Irma supporting the case for a gradually improving US economy. The MSCI Asia Pacific Index climbed 0.4%. The FBMKLCI’s top gainers were Petronas Gas (+3.5%), IHH Healthcare (+2.4%) and MISC (+1.2%), while the top losers were Telekom Malaysia (-0.3%), Petronas Chemicals Group (-0.3%) and Sime Darby (-0.1%). In the broader market, gainers outpaced losers 488 to 395 with 383 counters unchanged. Turnover was 3.66b shares valued at RM2.25b. In line with our earlier expectation, the FBMKLCI bucked regional sentiments and rose higher yesterday, culminating in a negative bias which has been lurking over the index in the past few weeks. Based on the daily chart, the index continues to form a series of higher highs and higher lows and managed to penetrate the previous immediate resistance of 1,787 yesterday. The bullish crossover in DMI suggests buying pressure has started to gain traction, which could lead to further upside in the near term. Although the negative bias in the short term has fully normalised, we maintain our long-term bullish bias. Support and resistance levels are revised as follows:

• Support: 1,766,1,752
• Resistance: 1,793, 1,800

US stocks closed higher on Tuesday as investor appetite for risker assets remained supported following a surge in financials amid a rebound in treasury yields while upbeat comments from Treasury Secretary Steven Mnuchin lifted sentiment. At the close in NYSE, the DJIA gained 0.28% to hit a new 1-month high, while the S&P 500 index gained 0.34%, and the NASDAQ Composite index added 0.34%. Rising stocks outnumbered declining ones on the NYSE by 1,901 to 1,169 and 163 ended unchanged; on the Nasdaq Stock Exchange, 1,561 rose and 933 declined, while 147 ended unchanged.

Source: UOB Kay Hian Research - 13 Sept 2017