All eyes on central banks’ meetings 

KLCI: 1552.83 (9.1)
DOW: 38714.77 (-190.9)
MSCI Asia: 174.59 (-1.8)
FCPO (RM): 4287 (-8)
BRENT (USD): 85.34 (-0.08)
USDMYR: 4.7072 (0.021)
SGDMYR: 3.5199 (0.002)
EURMYR: 5.13 (0.003)
AUDMYR: 3.0904 (-0.014)
GBPMYR: 6.0027 (-0.003)
US: 10-yr yield (%) 4.3063 (0.016)
BNM:10-yr yield (%) 3.853 (0.006)

Asia/US. MSCI All Countries Asia Pacific index slipped 1% to 174.59 (-1.8% WoW) as investors weighed in hotter-than-expected PPI readings which spurred more concerns over higher-for-longer interest rates, and a barrage of upcoming central bank meetings this week from Japan (19 Mar), Australia (19 Mar), China (20 Mar) and US (20 Mar). Sentiment was also dampened by sluggish Feb’s new home prices in China (-1.4% YoY, 8th straight month of decline) despite various support measures from Beijing to the beleaguered property sector. The Dow fell 190 pts to 38715 (-7 pts WoW) as investors recalibrated last week’s key inflation (above forecasts) and weak retail sales reports, underscoring concerns about the timing of rate cuts and economic growth. The centre of attention this week will be the FOMC meeting along with updates on the housing market.

Malaysia. Bucking the sluggish regional markets, KLCI jumped 9.1 pts to 1,552.8 (+13 pts WoW) due to bargain hunting activities on TM, CIMB, CDB, YTL, PBBANK and MAYBANK. Market breadth was positive for a 5th session at 1.10 vs 1.07 previously. Foreign investors continued their net outflows for the 12th out of the 13 sessions (-RM156m, Mar: -RM2.13bn, YTD: -RM126m), followed by local retailers (-RM88m, Mar: +RM11m, YTD: -RM1.03bn) whilst local institutions emerged as the major net buyers (+RM244m, Mar: +RM2.14bn, YTD: +RM1.16bn).

Outlook Ahead of the US and other major central banks’ meetings this week, we reckon that the market is likely to stay choppy, as persistent foreign outflows (-RM2.13 in Mar MTD after net buying RM3.81bn from Nov 2023 to Feb 2024) and the recent higher-then-expected US inflation data could force the market to reassess the timeline for US interest rate cuts. Major supports are pegged at 1,518-1,536-1541 while resistances are situated at 1,559-1,580 levels. 
 

Source: Hong Leong Investment Bank Research - 18 Mar 2024