MARKET REVIEW

Global. Ahead of the Sep US jobs report tonight, the MSCI Asia ex-Japan index jumped 2% to 635.2 as investors were relieved of a temporary deal after US Senate leaders moved to avert a U.S. debt default while a global easing in energy prices tempered deepening fears of "stagflation. The Dow rallied as much as 558 pts to 34976 as lawmakers reached an agreement on a stop-gap measure to raise the debt ceiling and temporarily avert a U.S. default. However, ahead of the key Sep jobs data tonight, the gains were cut to 338 pts at 34755 following a better-than-expected weekly jobless claims data that could give Fed the green light to begin tapering its bond purchases as early as Nov 2021.

Malaysia. After a 29-pt rally on 6 Oct, KLCI fell as much as 7.4 pts to 1552 on profit taking in early trades before steadily recouping the losses to end +1.9 pts at 1561.3. Market breadth turned positive for a 2nd day as gainers edged losers by 601-to-432 stocks. Trade flows wise, foreigners were the major net buyers for a 2nd consecutive session (+RM129m; 5D: -RM342m) whilst local institutions (-RM92m; 5D: +RM43m) and retailers (-RM37m; 5D: +RM20m) remained the net sellers.

TECHNICAL OUTLOOK: KLCI

Despite profit taking, KLCI managed to stage a rebound to end +1.9 pts to 1561.3, logging a 3rd straight winning streak. Tracking overnight Dow’s strong performance and bottoming up technical indicators, we expect KLCI to revisit immediate resistance near 200D SMA at 1576 soon. A successful breakout above 200D SMA will spur greater upside to re challenge 1600-1605 levels. Key supports now are revised upwards to 1530-1544 territory.

MARKET OUTLOOK

Following the progress toward US debt ceiling resolution and a resumption of foreign inflows for a 2nd straight session, Bursa Malaysia is expected to hold up as market risk appetite returned, riding on high commodity prices as well as economic reopening gaining traction. Major resistance is pegged at 1576 (200D SMA) whilst supports now are situated at 1530-1544 levels.

Source: Hong Leong Investment Bank Research - 8 Oct 2021