Market Review

• Selected Asian key benchmark indices ended higher, accompanied by softer trading volumes as some exchanges were closed for Good Friday holiday. The Nikkei 225 rallied 1.40% led by exporters amid weakening yen, while Shanghai Composite Index up 0.26%.

• On the local front, 1Q window dressing has lifted selected heavyweights and the FBM KLCI managed to hover above 1,860 at 1,863.46 pts (+0.38%). Also, oil and gas stocks remained actively traded amid firmer Brent oil prices. Market breadth turned positive with 476 gainers vs 384 losers. Overall market traded volumes, however was below 2.0bn at 1.82bn (RM1.90).

• Wall Street was closed for Good Friday. To recap, major indexes ended lower for the first time after 9-quarter streak of gains amid the emergence of negative news such as Facebook scandal and President Trump’s protectionist measures (imposing import tariffs on China).

Technical View

Pointing towards a symmetrical triangle pattern breakout

• The FBM KLCI has surged mildly above the trendline of the symmetrical triangle formation and the MACD Histogram has turned green last Friday. Also, both the RSI and Stochastics oscillators are recovering above 50, we believe the key index is likely to retest 1,876, followed by 1,896. Meanwhile, support will be pegged around 1,840-1,850.

Market Outlook

• Dow outlook: In the US, investors will be focusing on the March payroll report, which will be released next Friday and will be able to provide clarity of the jobs market in the US. Also, this may be a data that will be crucial for Federal Reserve to determine the interest rates outlook for the rest of the year.

• KLCI outlook: Stocks on the local bourse could trade on a cautious tone as investors still deploying a wait-and-see strategy ahead of the GE14. However, we believe trading interest should continue within selected oil and gas stocks amid the firmer Brent oil prices.

Source: Hong Leong Investment Bank Research - 2 Apr 2018