The FBMKLCI dropped 3.34pt and closed at 1,740.65 last Friday. Meanwhile, Asian shares mostly gained on Friday in Asia, though Tokyo dipped ahead of national polls at the weekend. The MSCI Asia Pacific Index dipped 0.2%. The FBMKLCI’s top gainers were IJM Corporation (+1.2%), Hong Leong Financial Group (+1.1%) and Digi.Com (+1.1%), while the top losers were AMMB Holdings (-2.5%), Genting Bhd (-2.1%) and PPB Group (-1.1%). In the broader market, gainers equalled losers at 438, while 391 counters were unchanged. Turnover was 1.74b shares valued at RM2.62b.

Last Friday, the FBMKLCI made a strong downward penetration as the index breached immediate support of 1,742 level to close lower at 1,740.65, suggesting a weaker shortterm outlook. Given the negative connotation, the base has not yet been established with potential support seen at 1,729 and the previous low of 1,713. Weaker movements can be expected ahead in tandem with increasing selling pressure as shown by a downtick in the RSI. Support and resistance levels are revised as follows:

• Support: 1,729,1,713
• Resistance: 1,766, 1,778

US stocks were higher after the close on Friday, as gains in the Industrials, Financials and Basic Materials sectors led shares higher. At the close in NYSE, the DJIA gained 0.71% to hit a new all-time high, while the S&P 500 index gained 0.51%, and the NASDAQ Composite index climbed 0.36%. Rising stocks outnumbered declining ones on the NYSE by 1,804 to 1,287 and 129 ended unchanged. On the Nasdaq Stock Exchange, 1,534 rose and 974 declined, while 143 ended unchanged.

Source: UOB Kay Hian Research - 23 Oct 2017