MARKET REVIEW

Global. Asian markets rose last Friday, helped by encouraging China’s service sector data and a truce in the US debt-ceiling standoff. Sentiment was also boosted by hopes of China’s ramp-up in monetary and fiscal supports after weak tourism data during the Golden Week holiday.

The Dow eased 9 pts to 34746 as investors digested a weaker-than-expected Sep jobs data (actual 194k vs forecast 500k) and ahead of the start of 3Q21 results season this week. Meanwhile, the Nasdaq skidded 0.5% to 14579 as US 10Y bond yield gained 0.04% to 1.61%, underpinned by higher wages and lower unemployment rate in the Sep jobs data and recent skyrocketing energy costs, which could support the Fed to begin tapering asset purchases by end 2021.

Malaysia. KLCI inched up 2.6 pts to 1563.9, recording its 4th straight winning streak, led by gains in the O&G and plantation stocks amid recent rallies in commodities prices . Market breadth turned positive for a 3rd day as gainers edged losers by 610-to-452 stocks. Trade flows wise, foreigners were the major net buyers for a 3rd consecutive session (+RM123m; 5D: +RM293m) followed by retailers (+RM3m; 5D: -RM68m). Meanwhile, local institutions remained net sellers for the 4th straight session (-RM126m; 5D: -RM225m).

TECHNICAL OUTLOOK: KLCI

Despite profit taking, KLCI managed to stage a rebound to end +2.6 pts to 1563.9 last Friday, logging its 1st weekly gain (+39.4 pts) after sliding 65.7 pts in the last five weeks. Following a strong reclaim above multiple key MAs and bottoming up technical indicators, we expect KLCI to revisit immediate resistance near 1576 (200D MA) soon. A successful breakout above 200D MA will spur greater upside to re-challenge 1600-1605 levels. Key supports now are revised upwards to 1530-1544-1558 territory.

MARKET OUTLOOK

Following the progress toward US debt ceiling resolution and a resumption of foreign inflows for a 3rd straight session, Bursa Malaysia is expected to progress further as market risk appetite returns, riding on high commodity prices as well as economic reopening gaining traction with interstate and overseas travels allowed for the fully vaccinated effective 11 Oct. Major resistance is pegged at 1576-1600 levels whilst support is situated at 1530-1558 levels.

Source: Hong Leong Investment Bank Research - 11 Oct 2021