Market review

• Asian stock markets trended mixed as Nikkei 225 declined 0.91% after stronger yen pressured export related stocks on Japan stock exchange, while Shanghai Composite Index and Hang Seng Index rose 0.39% and 0.62% respectively. Meanwhile, Trump-Xi summit is watched closely this week.

• The FBM KLCI was fluctuating within a four-point range before ending marginally higher by 1.70pts or 0.1% to 1,747.19 pts on the back of last minute push. Meanwhile, on the broader market, market breadth still with 533 advancers, 384 decliners, while 379 traded unchanged. Market volumes were encouraging near the 4.00bn mark at 3.97bn, worth 2.87bn.

• Wall Street was still trending in a tight range with US China summit setting a cautious tone to the market. As Trump promised a fair US trade during his election campaigns, the details of the meeting will be eyed closely. The Dow and S&P500 gained 0.19% and 0.06% respectively.

Technical view

Last minute buying support, resistance located around 1,750-1,760

• The MACD Line is hovering below the signal line and continues to trend lower, while the Stochastic is pointing downwards below the overbought region. Based on both the indicators, we expect upside could be capped along the 1,750-1,760 levels.

Market outlook

• We opine that the cautious tone may persist over the near term as few key events are closely monitored. The Dow may trend sideways over the near term until Trump-Xi meeting. Outcome on the meeting may dictate the direction of the markets.

• While sentiments on the overseas markets are cautious, we think share prices on Bursa Malaysia could trade on a more vibrant note supported by small caps and lower liners within the technology and e-Commerce segments on the back of the recent developments by Alibaba.

• Also, as the Brent crude oil recovered overnight above the US$54 level, we may expect short term trading interest to come back on oil and gas companies.

Source: Hong Leong Investment Bank Research - 5 Apr 2017