Lacklustre trading ahead of the Raya holidays and key US inflation reports 

KLCI: 1559.98 (4.7)
DOW: 38892.8 (-11.2)
MSCI Asia: 175.98 (0.8)
FCPO (RM): 4280 (-15)
BRENT (USD): 90.38 (-0.79)
USDMYR: 4.7525 (0.005)
SGDMYR: 3.5222 (0)
EURMYR: 5.1464 (0.001)
AUDMYR: 3.1295 (0.003)
GBPMYR: 6.0008 (0.002)
US: 10-yr yield (%) 4.4198 (0.018)
BNM:10-yr yield (%) 3.881 (0.043)

Asia/US. Mirroring a technical rebound from Wall St last Friday, most Asian markets ended higher as the US upbeat jobs data and healthy US economy overshadowed concerns of potential delay in interest rates cuts and a 0.7% fall on SHCOMP driven by renewed concerns over the beleaguered property sector (as developer Shimao faced liquidation suit). Dow fell 11 pts to 38,893 as upcoming major economic data such as CPI, PPI, Michigan consumer confidence and FOMC minutes will be the litmus tests for the Fed’s policy moving forward. Simultaneously, US earnings season kicks off on Friday with quarterly results from JP Morgan, Wells Fargo, Citigroup, and Blackrock. For 1Q24, the estimated YoY earnings growth rate for the S&P 500 is 3.2%, marking the 3rd straight YoY earnings growth. 

Malaysia. In line with higher Wall St last Friday and persistent local institutions’ support on selected heavyweights i.e. TENAGA, YTL, IHH, MAYBANK, NESTLE and KLK, KLCI rose 4.7 pts to a fresh YTD high at 1,560 yesterday. Local institutions (+RM121m, Apr: +679m, YTD: +RM2.86bn) turned into major net buyers for the 4th consecutive session while local retailers (-RM63m, Apr: -RM285m, YTD: -RM1.60bn) joined foreign institutions (-RM58m, Apr: -RM394m, YTD: -RM1.27bn) to emerge as major net sellers. 

Outlook After closing at YTD high of 1,560 yesterday, KLCI may ride on the positive momentum to register its 4th consecutive gains today (resistances: 1,570-1,585), barring a decisive fall below 1,536-1,545 support levels. Nevertheless, cautious sentiment prevails as investors assess (i) US inflation data and expectations for Fed rate-cut policy, (ii) heightened geopolitical tensions and commodity-driven inflation resurgence, (iii) the commencement of the US 1Q24 results season this Friday, (iv) RM weakness and persistent foreign net selling (for the 6th consecutive weeks), and (v) the start of Bursa Malaysia 1Q24 results season (expected from the 4th week of April). 

Source: Hong Leong Investment Bank Research - 9 Apr 2024