The FBMKLCI rose 3.77pt (+0.22%) to close at 1,700.31pt yesterday. Meanwhile, Asian stocks rose for a third day, with the regional benchmark index heading for a two-month high, led by Shanghai and Tokyo shares ahead of policy reviews by the Bank of Japan and the US Federal Reserve. The MSCI Asia Pacific Index climbed 0.9% to 127.92 as at 5.08pm in Tokyo, poised for the highest close since 5 January. The FBMKLCI’s top gainers were Genting Malaysia (+3.1%), Petronas Chemicals Group (+1.0%) and MISC (+1.0%) while the top losers were Petronas Dagangan (-1.6%), Petronas Gas (-1.4%) and AMMB Holdings (-0.7%). In the broader market, gainers outpaced losers 419 to 412 with 360 counters unchanged. Turnover was 1.47b shares valued at RM1.61b.

The FBMKLCI continued to form a higher high and higher low on yesterday’s movement and managed to break the psychological level of 1,700. From a technical perspective, the RSI line rose above 50pt, which signals weaker selling pressure and thus may push the index higher in the near term. This is supported by a bullish crossover in the MACD and DMI. We expect the index will continue the upward movement if it manages to maintain the movement above the 1,700 level. Support and resistance levels are as follows:

• Support: 1,640, 1,621
• Resistance: 1,728, 1,744

US stocks finished marginally higher on Monday, with the Dow logging its highest close of the year despite a drop in oil prices. The Dow Industrials finished 15.48pt, or 0.1%, higher at 17,228.72. The S&P 500 shed 2.59pt, or 0.1%, to 2,019.58, while the Nasdaq Composite gained 1.81pt, or less than 0.1%, to 4,750.28. The correlation between stocks and oil prices will likely loosen as long as prices remain near their recent highs, analysts said. The Fed’s two-day policy meeting kicks off on Tuesday, with a policy statement slated to be released on Wednesday. A number of other central banks, including the Bank of Japan, Bank of England and Swiss National Bank, are expected to announce policy moves sometime this week. The Fed is widely expected to keep key interest rates on hold even if recent data support the case for a rate hike.

Source: UOB Kay Hian Research - 15 Mar 2016