MARKET REVIEW

Global. Asian markets were mostly down amid worries about soaring energy prices and potential U.S government debt default. Overnight, the Dow skidded as much as 460 pts amid lingering concerns about a potential US government debt default and surging inflation driven by escalating energy costs and supply chain disruptions. However, the index made a big comeback to end +106 pts at 34,473.4 after Republican lawmakers softened their stance on a debt ceiling extension.

Malaysia. In line with rallies in most of the ASEAN markets, KLCI surged 29 pts to 1559.4, led by persistent buying in plantation, banking, and O&G heavyweights. Market breadth turned positive as gainers edged losers by 612-to-443 stocks. Trade flows wise, foreigners reversed as net buyers amounting to RM135m after net sold RM535m in four straight sessions. Meanwhile, local institutions and retailers emerged as net sellers amounting to RM96m and RM38m, respectively.

TECHNICAL OUTLOOK: KLCI

After rallying 29 pts yesterday to end at 1559.4 (closing above multiple key MA lines), we expect KLCI to revisit immediate resistance near 200D SMA at 1577 soon, underpinne d by uptick in technical indicators. A successful breakout above 200D SMA will spur greater upside to re-challenge 1605 levels. Key supports now are revised to 1533-1544 territory.

MARKET OUTLOOK

In the wake of progress toward US debt ceiling resolution and a resumption of foreign inflows after four days of net selling, Bursa Malaysia is expected to hold up as market risk appetite returned amid hopes of rising vaccination levels, falling infection rates, and economic reopening gaining traction. Major resistance is pegged at 1577 (200D SMA). A successful breakout above 200D SMA will spur greater upside to re-challenge 1605 levels. Key supports now are situated at 1537-1544 levels.

Source: Hong Leong Investment Bank Research - 7 Oct 2021