Global. Notwithstanding worries of high inflation that could prompt central banks to hike interest rates quicker than expected, the MSCI Asia ex-Japan index rose 1.58 pts to 657.86, encouraged by positive developments in Biden-Xi virtual meeting. Wall St gained overnight (Dow:+55 pts to 36142; S&P: +18 pts to 4701; Nasdaq:+121 pts to 16310), underpinned by consumer discretionary stocks following upbeat results from the Home Depot and Walmart coupled with a strong Oct retail sales report.
Malaysia. KLCI ended flat (+0.55-pt at 1522.9) after moving between 1518.9 and 1,528.1 in the course of the day as investors weighed on the Biden-Xi virtual meeting, upcoming Melaka polls (20 Nov) and ongoing 3Q21 results season. Market sentiment stayed edgy, against a backdrop of negative market breadth in 8 of the last 10 days, persistent net selling from domestic institutions (5D: -RM390m) while both the local retailers (5D: +RM32m) and foreigner (5D: +358m) remained net buyers.
We reiterate our view that KLCI will be stuck in consolidation mode unless the benchmark can break above the key 1545-1560 resistance successfully. Clearing these hurdles will lift the index towards 1568-1576-1590 territory. On the flip side, severe downside seems limited at 1500-1515 zones amid grossly oversold technical indicators.
We expect the KLCI would probably stay into a consolidation mode for the time being (stiff resistances: 1545-1560), ahead of the Melaka state polls (20 Nov) and ongoing Nov results season coupled with the concern of rising R-Naught since 6 Nov. Nevertheless, the downside risk is limited (key supports: 1500-1515 zones), supported by grossly oversold indicators, aggressive economic reopening activities with more states are moving to phase 4 of NRP, high vaccination rate (76% of the total population fully vaccinated on 16 Nov), the reopening of KLIA and Changi Airport (29 Nov) and firm commodity prices.
Source: Hong Leong Investment Bank Research - 17 Nov 2021
Created by HLInvest | Jul 19, 2024