MARKET REVIEW

Global. Tracking record highs from S&P 500, Asian markets ended mildly higher on optimism from the Fed’s commitment to supportive policy, while worries over a surge in local coronavirus cases capped gains. The S&P 500 closed at a record high for a 2nd day, led by technology and other growth stocks as the US 10Y Treasury yields fell (-0.05% to 1.62%) following softer-than-anticipated labour market data and Powell said Fed’s ultra accommodative monetary policies will stay for a while as he sees the recovery remains uneven and incomplete. The Dow and S&P 500 ended +57 pts and +17 pts to 33503 and 4097, respectively whilst the Nasdaq rallied 140 pts to 13829.

Malaysia. KLCI gained as much as 9 pts before closing +1.8 pts at 1602.4, led by a strong resumption of bargain hunting interests in KLCI-linked glove makers with the resurgence in global Covid-19 cases. Trading volume was 7.6bn shares (+1.3bn vs previously) valued at RM4.9bn (+RM1.3bn vs previously) while market breadth remained positive as the G/L ratio eased to 1.12 from 1.33 previously. After a strong RM151m net buying on 7 Apr, foreign investors net sold RM44m yesterday (5D: +RM11m; 16% of trading value) whilst the local institutions (+RM36m; 5D: -RM53m; 45.5% of trading value) and local retailers (+RM8m; 5D: +RM42m; 38.5% of trading value) emerged as net buyers.

TECHNICAL OUTLOOK: KLCI

Despite closing a tad above the 1600 (support trendline from 1452), KLCI could still be stuck in a range bound consolidation mode unless 1607 (100D SMA) and 16 21 (downtrend line from 1696) barriers are taken out decisively. Only a successful breakout above these levels will spur KLCI higher towards 1635-1646-1656 (200W SMA) zones whilst a fall below 1594 (50D SMA) will aggravate downward consolidation towards 1571 (200D SMA) and 1557 territory.

MARKET OUTLOOK

Tracking bullish Wall St performance overnight, KLCI should attempt to regain further grounds today. However, present range bound consolidation mode may prevail unless more concrete local catalysts emerge. Key supports are situated at 1594-1571-1557 whilst stiff resistances are pegged at 1607-1621-1635 zones.

Following the Celcom-Digi mega merger deal announcement, AXIATA should resume its uptrend towards RM3.95-4.15 resistances amid the Cup with Handle formation. Key supports are situated at RM3.55-3.68 levels. Meanwhile, DIGI could advance further towards RM3.80-4.03 territory following the downtrend line breakout. Key supports are pegged at RM3.50-3.57 levels.

Source: Hong Leong Investment Bank Research - 9 Apr 2021