MARKET REVIEW

Asia/US. Asian markets fell as investors fretted about global economic uncertainties and the prospect of further Fed’s tightening campaign to tame inflation after minutes from the latest US FOMC meeting reinforced a hawkish tone. Ahead of the Jan core PCE index tonight (a Fed's preferred inflation measure), Dow staged a 109-pt rebound from a 250-pt slide to end at 33,154 as investors parsed through a downwardly revised US 4Q GDP against an upturn in the Jan Chicago Fed National Activity Index and lower weekly jobless claims (signalled concern of an unrelenting labour market tightness), validating the Fed to keep rates restrictive for an extended period to bring down inflation.

Malaysia. In tandem with sluggish regional markets, KLCI slipped 6.3 pts at 1,457.7, recording its 5th decline in the last 6th session, as sentiment remained under pressure ahead of the revised Budget 2023 today coupled with the ongoing results season. Despite the negative closing, market breadth rebounded to 1.18 from 0.42 previously. For the 4th

day in a row, foreign institutions were the net buyers (+RM41m, Feb: -RM18m), followed by retailers (+RM32m, Feb: +RM318m) whilst local institutions were the major net sellers for the 7th straight session (-RM73m, Feb: -RM300m).

TECHNICAL OUTLOOK: KLCI

KLCI resumed its selling momentum, falling 6.3 pts to close at 1,457.7. The decisive breakdown below the 200D MA (1,476) could trigger further correction towards 1,432-1,450 zones before staging an imminent rebound. Conversely, the benchmark must stage a convincing breakout above the immediate 1,476 and 1,481 (20D MA) clusters for a resumption of uptrend towards 1,500-1,528 targets.

MARKET OUTLOOK

Tracking an extended correction on Wall Street, weakening RM amid caution over the Fed rate outlook and widening FFR-OPR spread, coupled with pending more solid cues on Budget 2023 revision today, KLCI is likely to remain under siege (support: 1,432-1,450; resistance: 1,476-1,481-1,500) after sliding below the key 200D MA or 1,476 levels. Technically, AMBANK looks attractive to accumulate at current levels following the hammer pattern formation with solid supports at RM3.66-3.74 territoty, while a convincing surge above the RM3.96-4.07 hurdles should witness the stock to revisit 52-wk high at RM4.24.

VIRTUAL PORFOLIO (FIG1)

We Squared Off GENTING (7.3% Loss) Amid Weakening Technicals.

Source: Hong Leong Investment Bank Research - 24 Feb 2023