MARKET REVIEW

Global. Ahead of the crucial US Jan jobs data tonight, Asian bourses ended mixed in lacklustre trades (China, Hong Kong, Taiwan, Vietnam, and the Philippines remained close for Lunar New Year holidays), as investors weighed on the heightened Russia-Ukraine tension, OPEC+ moderate increase in March production by 400k bpd and a slide in Nasdaq futures following disappointing Meta results and weak guidance. Wall St tanked overnight (Dow: -1.4% to 35111/-5% from all-time high 36952; Nasdaq 100: -3.7% to 13879/-14% from all-time high 16212), snapping a 4-day rally as tech and social media stocks weighed on investors’ mood following dour results and outlook from Meta Platforms. Nevertheless, Nasdaq 100 futures recovered ~1.8% amid strong gains in Amazon shares (+14% in extended trading) following a strong 4Q21 results and positive outlook guidance.

Malaysia. Tracking the relief rally in US markets lately, KLCI witnessed a post CNY catch up play (+13.5 pts to 1525.7), led by bargain hunting activities in telco, banking and plantation heavyweights. Market breadth was positive with gainers thumped losers by 563 to 269 whilst total turnover reached 2.05bn shares valued at RM1.62bn. After net selling RM332m in the last seven straight sessions, local institutional funds turned net buyers for a 3rd straight session (+RM18m; 5D: +RM203m) in equities whilst local retailers (-RM8m; 5D: -RM28m) and foreign investors (-RM10m; 5D: -RM174m) were the major net sellers.

TECHNICAL OUTLOOK: KLCI

Following a steeply oversold position after tumbling 67 pts from 1570 to 1503, KLCI managed to pare its losses to end at 1525.7 yesterday. The strong reclaim above the key 1515 neckline support and bottoming up indicators may spur the index to retest 1533 (38.2% FR) and 1547 (200D MA) levels in the near term. A strong breakout above 1547 will strengthen the rebound towards more formidable hurdles at 1570-1600 territory. Key supports are situated at 1500-1515 levels.

MARKET OUTLOOK

Tracking the resumption of wild swings in Wall St, KLCI recent rebound from 1503 is likely to witness stiff hurdles near 1533-1547-1570 levels (supports: 1500-1515), clouded by lingering concerns about the Fed’s hawkish pivot, heightened Russia-Ukraine conflict, rising Omicron wave in Malaysia, Feb reporting season and Johor snap elections.

Source: Hong Leong Investment Bank Research - 4 Feb 2022