MARKET REVIEW

Asia/US. Asian markets wavered as investors await the BOJ policy-setting decision today while keeping an eye on policy priorities from government, business, and civil society prominent leaders at the World Economic Forum (WEF) in Davos, as well as from several Fed officials’ speeches this week. Nevertheless, sentiment continued to be supported by investors’ optimism on China border reopening and expect recovery this year after Covid wave passes, and easing inflation in the US will underpin global growth. Weighed down by financials, the Dow fell 391 pts, snapping its 4-day 785 pts winning streak, as concerns over the 4Q22 corporate earnings outlook weighed on risk sentiment while investors assessed the path for policy tightening as a litany of Fed officials are going to deliver their speeches this week. Goldman Sachs slid 6.5% after reporting its largest earnings miss in a decade following declines in investment banking and asset management revenues, while Morgan Stanley jumped 5.8% amid upbeat earnings, in part due to record wealth management revenue.

Malaysia. Contrary to the mixed regional markets’ trends, the KLCI closed 5.8 pts higher after falling as much as 4.6 pts intraday, led by bargain hunting on selected heavyweights such as DIGI, PCHEM, AXIATA, PMETAL, PE TGAS and DIALOG. Market breadth (gainers/losers ratio) stayed positive at 1.01 vs 0.85 a day ago. Local institutions turned net sellers after net buying in the last sixth consecutive sessions (-RM64m, Jan: +RM272m) followed by local retailers (-RM21m, Jan: -RM324m), which recorded their net outflows for the seventh consecutive sessions. Meanwhile, after net selling RM33m from 3-16 Jan, foreigners (+RM85m, Jan: +RM52m) emerged as net buyers again.

TECHNICAL OUTLOOK: KLCI

As long as KLCI holds up above the support trend line (near 1,480) and 200D MA (1,489 now), we reckon the bulls will have the upper hand to retest 1,512-1,528 in the short term. Conversely, a decisive break down below the support trend line would trigger a selloff towards 1,454-1,468 zones.

Daily KLCI: Poised to retest 1,500-1,528 levels after crossing above 200D MA

MARKET OUTLOOK

Tracking overnight slump from Wall St and ahead of the BOJ and BNM monetary decisions, KLCI may trend sideways ahead of the long CNY holidays (22-24 Jan). Technically, KLCI may continue to nudge higher to retest 1,512-1,528 hurdles (supports: 1,468-1,482), barring any decisive fall below the support trend line (near 1,480) and 200D MA (1,489 now).

Source: Hong Leong Investment Bank Research - 18 Jan 2023