The FBMKLCI lost 5.33pt to close at 1,736.14 yesterday as profit-taking, particularly in index-linked counters, sent the index lower after recording a positive closing on Monday. Meanwhile, Asian shares held within striking distance of recent decade-highs on Tuesday and major currencies kept to narrow ranges, while the New Zealand dollar fell after the country's incoming Labour government laid out its left-leaning priorities. The MSCI Asia Pacific Index rose 0.2%. The FBMKLCI’s top gainers were IOI Corporation (+1.6%), Petronas Dagangan (+0.9%) and AMMB Holdings (+0.5%), while the top losers were Genting Malaysia (-2.3%), IJM Corporation (-1.8%) and British American Tobacco (-1.4). In the broader market, losers outpaced gainers 599 to 276 with 409 counters unchanged. Turnover was 2.49b shares valued at RM2.13b.

The FBMKLCI continued to form a lower highs and lower lows to close lower at 1,735.14 yesterday. However, given the absence of significant change, we still maintain our neutral outlook. We maintain our stance that the index may consolidate further given a lack of buying demand at the current level. Nevertheless, we remain bullish over the longer term as the current weakness can be perceived as a normal correction. Support and resistance levels are as follows:

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

US stocks were higher after the close on Tuesday, as gains in the basic materials, industrials and financials sectors led shares higher. At the close in NYSE, the DJIA added 0.72% to hit a new all-time high, while the S&P 500 index added 0.16%, and the NASDAQ Composite index added 0.18%. Rising stocks outnumbered declining ones on the NYSE by 1,638 to 1,441 and 137 ended unchanged; on the Nasdaq Stock Exchange, 1,243 fell and 1,239 advanced, while 160 ended unchanged.

Source: UOB Kay Hian Research - 25 Oct 2017