MARKET REVIEW

Global. Asian markets ended higher last Friday, thanks to rosy economic optimism remarks by Powell on the US economy and the World Bank on China (will lead the economic recovery of East Asian and Pacific economies from Covid-19) in 2021, in a week marred by coronavirus resurgence fears, rising Sino-US tensions and the Lira's slump.

Following a tame inflation data and a strong March consumer sentiment index, Wall St enjoyed a broad-based rally on Friday with technology, healthcare and financial stocks providing the biggest lift as investors bet on a recovery that is expected to deliver the fastest economic growth since 1984.The Dow surged 453 to 33073 (+1.4% WoW) and the S&P 500 gained 65 to 3975 (+1.6% WoW) whilst the and the Nasdaq 100 rallied 161 pts to 13138 (+0.6% WoW).

Malaysia. Tracking higher regional markets, KLCI inched up 3.7 pts to end at 1601.4 last Friday amid buying interests on DIGI, GENM, TOPGLOV, PBBANK and AXIATA. On the broader market, turnover was 6bn shares (-0.1bn shares vs Thursday) worth RM3.2bn while sentiment improved markedly as the G/L ratio jumped to 2.0 from 0.74 previously. The local institutional (-RM41m; 5D: +RM10m) and retailers (-RM5m; 5D: +RM229m) investors were the major sellers whilst the foreign (+RM46m; 5D: -RM239m) investors were the major buyers.

TECHNICAL OUTLOOK: KLCI

After sliding 57pts from March’s high of 1642 (10 March) to a low of 1585 (24 March low), KLCI staged a mild technical rebound to finish at 1601 last Friday (-25 pts WoW). Unless quickly reclaiming above the key 1618 resistance, KLCI may continue to lock in sideways consolidation mode in the near term in the absence of fresh impetus, with key supports at 1585-1569-1557 zones. Only a strong breakout above 1618 will spur the benchmark higher towards 1642-1658 zones.

MARKET OUTLOOK

Potential 1Q21 window dressing activities coupled with strong rallies in Wall St and crude oil prices last Friday could act as upside catalysts this week, as KLCI may retest 1618-1642 zones. Nevertheless, a fresh bout of volatility due to the uncomfortable spike in the 10-year Treasury yields, worries on Covid-19 3rd wave-infection in Europe (amid mutating virus and vaccination delays), and major global supply chain disruptions as efforts to dislodge a gigantic ship stuck in the Suez Canal continue. Major supports are pegged at 1585-1569- 1557.

Source: Hong Leong Investment Bank Research - 29 Mar 2021