MARKET REVIEW

Global. Mirroring the tumultuous Wall Street performance, Asian markets fell as investors braced for a more hawkish Fed outcome and escalating Russia-Ukraine tensions. Wall St experienced another roller-coaster session but was unable to completely shake off the intraday steep losses, dragged by massive selldown in tech stocks ahead of the FOMC meeting outcome (US time: 26 Jan) and mounting geopolitical tensions in Russia-Ukraine. During the day, the Dow dived as much as 815 pts to 33545 before closing -66 pts at 34298 pts (-7.2% from all-time high 36952) whilst the Nasdaq 100 plunged 360 pts at 14149 (-15.6% from all-time high 16767). Meanwhile, Brent oil prices surged 2.2% to USD88.2, underpinned by fears about potential supply disruptions as geopolitical tensions in Eastern Europe and the Middle East continue to rise.

Malaysia. In line with sluggish Wall St and regional markets, KLCI slid 12.95 pts to record its 7th consecutive decline (with a total loss of 60.6 pts). The overall market breadth was bearish with decliners outnumbering advancers 803 to 215 whilst total turnover stayed light at 2.8bn shares valued at RM2.15bn. Both local institutional funds (-RM63m; 5D: - RM264m) and retailers (-RM25m; 5D: +RM34m) were the major sellers while foreign investors net bought RM89m shares (5D: +RM231m).

TECHNICAL OUTLOOK: KLCI

Despite the grossly oversold position after sliding 60.6 pts in 7th consecutive sessions, KLCI’s near term outlook remain negative after staying below multiple key MAs and neckline support near 1515. The downward momentum would likely persist with the next crucial supports at 1475-1500. Stiff hurdles are situated at 1522-1533-1549 zones.

MARKET OUTLOOK

Tracking the extended rout in Wall St overnight, Bursa Malaysia should remain under pressure given the bearish market undertone, clouded by concerns that the Fed may lean towards a more aggressive monetary tightening stance to contain skyrocketing inflation, escalating Russia-Ukraine conflict and the CNY celebrations next week. On the index, the confirmed breakdown below multiple key MAs and 1515 supports will grease correction towards 1475-1500 zones whilst resistances are situated at 1522-1533-1549 territory.

Source: Hong Leong Investment Bank Research - 26 Jan 2022