Consolidate Gains Ahead of the FOMC Decision and Key US & China Economic Data 

KLCI: 1512.75 (-2.6)
DOW: 38467.31 (133.9)
MSCI Asia: 165.57 (-1.1)
FCPO (RM): 3848 (6)
BRENT (USD): 82.87 (0.47)
USDMYR: 4.7273 (-0.006)
SGDMYR: 3.5292 (0)
EURMYR: 5.1184 (-0.005)
AUDMYR: 3.1227 (-0.002)
GBPMYR: 5.9949 (-0.018)
US: 10-yr yield (%) 4.0319 (-0.042)
BNM:10-yr yield (%) 3.88 (0.09)

Asia/US. Asian bourses ended mixed as investors awaited major economic data from the US and China coupled with the FOMC decision today. Sentiment remained edgy amid heightened geopolitical tension in the Middle East and investors weighed the repercussions of Evergrande Group’s liquidation to China's embattled property market. Dow soared 134 pts to set a fresh record high at 38,467 while the Nasdaq fell 118 pts to 15,510 as the market weighed a flurry of high-profile corporate earnings (i.e. GM, AMD, MFST, GOOG and UPS) and the upbeat JOLTS and CB consumer confidence reports. Meanwhile, the US10Y bond yield eased 4 bps to 4.03% as traders braced for the FOMC decision and guidance on the outlook for monetary policy. 

Malaysia. In line with the cautious regional markets, KLCI surrendered all its gains to end 2.6 pts lower at 1,512.8, its 1st drop in 7 days. Market breadth was negative for a 2nd session at 0.58 vs 0.97 a day ago. For a 2nd day, local institutions (+RM54m, Jan: +RM109m) emerged as the only net buyers while foreign investors (-RM25m, Jan: +RM513m) and local retailers (-RM29m, Jan24: -RM676m) were the major net sellers. 

Outlook: Prior to the FOMC decision and key US & China economic data (e.g. PMIs and jobs data) for the rest of this week, sentiment on the local bourse could turn cautious, reflected by the negative market breadth ratio for a 2nd session. Major supports are pegged at 1,490-1,500 zones while resistances are situated at 1,528-1,550 levels. 

VIRTUAL PORTFOLIO We had squared off our position in SMRT (8.5% loss) after hitting our cut loss position.  

Source: Hong Leong Investment Bank Research - 31 Jan 2024