The FBMKLCI slid 6.18pt to close at 1,758.06, dragged down by extended profit taking on index stocks despite positive sentiment across the region. Meanwhile, most Asian stocks outside of Japan fell as investors began to assess the implications of the muchanticipated tax proposal. The MSCI Asia Pacific Index fell 0.4%, slightly eroding a gain in the third quarter.The FBMKLCI’s top gainers were IOI Corporation (+1.6%), Axiata Group (+0.6%) and British American Tobacco (+0.5%), while the top losers were Astro Malaysia Holdings (-3.5%), Westports Holdings (-3.1%) and Genting Malaysia (-1.8%). In the broader market, losers outpaced gainers 506 to 328 with 368 counters unchanged. Turnover was 2.31b shares valued at RM2.19b.

From the technical perspective, the FBMKLCI closed lower and formed a bearish candlestick pattern yesterday and penetrated the immediate support level of 1,760, suggesting weaker performance ahead. However, a negative follow-through needs to be established in order to confirm the downtrend. The index halted within the 21-day EMA line with negative reading in MACD. This should signal further correction ahead. Nevertheless, the 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: 1,756,1,752
• Resistance: 1,793, 1,800

US stocks were higher after the close on Thursday, as gains in the basic materials, utilities and financials sectors led shares higher. At the close in NYSE, the DJIA added 0.2%, the S&P 500 index added 0.1%, and the NASDAQ Composite index added 0.01%. Rising stocks outnumbered declining ones on the NYSE by 1,777 to 1,288, and 145 ended unchanged. On the Nasdaq Stock Exchange, 1,374 rose and 1,094 declined, while 172 ended unchanged.

Source: UOB Kay Hian Research - 29 Sept 2017