In consolidation mode as investors digest Nov results season and ongoing foreign net outflows

KLCI: 1621.24 (-2)
DOW: 43988.99 (259.7)
MSCI Asia: 189.52 (-0.1)
FCPO (RM): 5101 (149)
BRENT (USD): 73.92 (0.05)
USDMYR: 4.3825 (-0.022)
SGDMYR: 3.317 (-0.002)
EURMYR: 4.7241 (-0.009)
AUDMYR: 2.9113 (-0.008)
GBPMYR: 5.68 (-0.005)
US: 10-yr yield (%) 4.3043 (-0.021)
BNM:10-yr yield (%) 3.878 (-0.042)

Asia/US. Despite Wall St’s rally amid optimism surrounding Trump’s landslide victory and his pro-growth and deregulatory policies, most Asian markets ended mixed as investors recalibrated their expectations of Trump’s confrontational and protectionist pledges. Additionally, markets were awaiting possible more fiscal measures following the conclusion of China’s NPC meeting to support the flagging economy. The Dow’s extended its post-election rally (+260 pts, +4.6% WoW to 43,989) as the Trump presidency 2.0 and a possible “Red Sweep” fuelled expectations of pro-business policies. Sentiment was also boosted by a favourable Fed’s 25-bps cut and Powell’s confidence in the US economy. This week, all eyes shift to CPI, PPI, retail sales, and speeches by Fed officials to seek clues on the Fed’s policy outlook in the wake of Trump 2.0 presidency.

Malaysia.  Tracking mixed regional markets and continued foreign net selling, KLCI eased 2 pts to 1,621.2. Market breadth fell o 0.52 vs 0.70 previously, with 2.70bn (-4.9% vs Nov avg 2.84bn) shares traded valued at RM1.86bn (-25% vs avg Nov RM2.55bn). Foreign institutions were the major net sellers (-RM109m, Nov: -RM463m, YTD: +RM1.32bn) while local institutions (+RM62m, Nov: +RM639m, YTD: +RM3.59bn) alongside local retailers (+RM47m, Nov: -RM176m, YTD: -RM4.90bn) emerged as major net buyers.

Outlook Ahead of the Nov results season, the KLCI is likely to consolidate further (support: 1,589-1,600-1,607; resistance: 1,632-1,648-1,656) due to a lack of domestic catalysts and continued foreign net outflows for the 3rd straight week (Nov: -RM463m, Oct: -RM1.77bn). Moreover, the outlook may be tempered by external risks, including lingering Middle East turmoil, as well as bracing for more economic fluidity and market volatility under Trump 2.0 presidency.

Source: Hong Leong Investment Bank Research - 11 Nov 2024