The FBMKLCI dropped 0.80pt (-0.05%) to close at 1,754.58 yesterday as investors remain cautious over the lack of fresh local catalysts. Meanwhile, stocks were mixed in the Asia Pacific region as investors contemplate prospects for stimulus in the world’s two largest economies, with the Trump administration taking steps towards tax cuts and China unveiling a targeted boost to the availability of credit.The FBMKLCI’s top gainers were AMMB Holdings (+0.92%), Public Bank (+0.69%) and CIMB Group Holdings (+0.64%), while the top losers were Telekom Malaysia (-3.1%), KLCC Property Holdings (-2.3%) and British American Tobacco (-1.9%). In the broader market, losers outpaced gainers 538 to 288 with 372 counters unchanged. Turnover was 2.23b shares valued at RM1.74b. The FBMKLCI continued to slide lower yesterday and penetrated the immediate support of 1,752. The declining RSI suggests that selling pressure is set to continue in the immediate term. This bearish movement is also supported by a bearish crossover in the MACD and DMI. Thus, we continue to expect the index to retest the new immediate support of 1,746. Any violation of this level could extend the downtrend towards the next support of 1,741. The support and resistance levels are revised as follows:

• Support: 1,746,1,741
• Resistance: 1,776, 1,790

US stocks started 4Q17 on a strong note on Monday, with all three major indexes hitting record high closes as data pointed to underlying strength in the economy. Gains in the basic materials, healthcare and industrials sectors led shares higher. At the close in NYSE, the DJIA rose 0.68% to hit a new all-time high, while the S&P 500 index added 0.39%, and the NASDAQ Composite index added 0.32%. Rising stocks outnumbered declining ones on the NYSE by 1,993 to 1,093 and 128 ended unchanged; on the Nasdaq Stock Exchange, 1,812 rose and 722 declined, while 109 ended unchanged.

Source: UOB Kay Hian Research - 3 Oct 2017