Building a Base Near 1,500 Before Re-challenging 1,528-1,548 Zones 

KLCI: 1513.11 (0.1)
DOW: 38677.36 (156)
MSCI Asia: 168.11 (0.8)
FCPO (RM): 3861 (-16)
BRENT (USD): 79.21 (0.62)
USDMYR: 4.7607 (-0.007)
SGDMYR: 3.5445 (0.003)
EURMYR: 5.1271 (0.012)
AUDMYR: 3.1085 (0.012)
GBPMYR: 6.0145 (0.035)
US: 10-yr yield (%) 4.1211 (0.021)
BNM:10-yr yield (%) 3.827 (0.008)

Asia/US. Asian markets mostly rose, buoyed by China's proactive measures to prevent a fourth consecutive year of decline. These include wider trading curbs, pledges from the sovereign wealth fund to increase equities holdings, and state purchases of major bank stocks. The Dow jumped 156 pts to 38,677 while S&P 500 ended +40.8 pts to a fresh record high of 4,995, led by major technology behemoths following a slew of better-than-expected earnings results (eg FORD, ARM, DIS, CMG etc). The advance came despite a recent retreat in 2024 rate expectations (i.e. to stay high-for-longer given the strong US economy until inflation is moving down to 2% goal) following cautious commentary from the Fed officials. Yesterday, Fed President Kashkari said that he anticipates only 2-3 rate cuts this year.

Malaysia. KLCI was trading at a tight range bound mode between 1,510.2 to 1,514.1 before ending +0.13-pt to 1,513.1 due to the lack of fresh catalysts and ahead of the CNY holidays.    Market breadth was negative at 0.7 vs 1.14 a day ago. Foreign investors (+RM33m, YTD: +RM990m) continued its net inflows for the 5th straight session while local institutions (-RM-21m, YTD: -RM275m) and local investors (-RM12m, YTD: -RM715m) were the major net sellers.

Outlook Bursa Malaysia may continue its tight rangebound trading pattern near 1,500 psychological support before re-visiting the 1,528-1,548 hurdles, ahead of the CNY celebrations (Bursa holiday: 12 Feb). Market sentiment is also likely to remain cautious due to ongoing concerns about the Fed's stance on higher-for-longer interest rates, uncertainties surrounding the sustainability of China's stock market rebound, and anticipation of a flurry of upcoming results after the CNY. 

Source: Hong Leong Investment Bank Research - 8 Feb 2024