Subdued Mood Amid the Peak Results Season and Geopolitical Risks 

Technical Pick: FOCUSP

KLCI: 1598.18 (-4.2)
DOW: 43408.47 (139.5)
MSCI Asia: 182.75 (-1.2)
FCPO (RM): 4755 (-60)
BRENT (USD): 72.81 (-0.5)
USDMYR: 4.4713 (-0.001)
SGDMYR: 3.3304 (-0.006)
EURMYR: 4.7197 (0.001)
AUDMYR: 2.9114 (0.009)
GBPMYR: 5.6649 (0.017)
US: 10-yr yield (%) 4.41 (0.014)
BNM:10-yr yield (%) 3.808 (-0.035)

Asia/US. Asian markets ended mixed in cautious trades as investors awaited major results from NVDA amid mounting geopolitical tensions between Ukraine and Russia after Biden authorised Ukraine to use long-range US missiles against Russia. On economic front, attention is shifting towards Japan’s CPI data on Nov 22 after PBOC kept key lending rates unchanged as widely expected. The Dow gained 139 pts to 43,408, recovering from a 689-pt slump in last four sessions, as investors awaited the highly anticipated NVDA results, and assessing the rising geopolitical tensions between Russia and Ukraine alongside the crucial announcement for Trump’s Treasury secretary role. After hours, NVDA fell 2.3% following a disappointing revenue forecast.

Malaysia. In tandem with the jittery mood from Wall St and regional markets, KLCI slipped 4.1 pts. Market breadth returned to negative mode at 0.84 vs 1.29 previously while trading volume reduced 3.9% to 2.72bn shares valued at RM2.44bn. Foreign institutions emerged as the major net sellers (-RM47m, Nov: -RM715m, YTD: +RM1.06bn) alongside local retailers (-RM31m, Nov: -RM207m, YTD: -RM4.93bn) whilst local institutions (+RM78m, Nov: +RM922m, YTD: +RM3.87bn) were the major net buyers. 

Outlook In wake of the of the Nov results season and continued foreign net outflows (Nov: -RM715m, Oct: -RM1.77bn), KLCI is likely to consolidate further (support: 1,580-1,589; resistance: 1,625-1,635-1,648) in the near term. Additionally, rising geopolitical risks (particularly in Russia-Ukraine and Middle East), China’s weak growth, as well as expectations of more confrontational and protectionist policies under Trump 2.0 could trigger more market volatility. 

Technically, FOCUSP is poised to stage a LT bullish triangle breakout soon after closing above the key 200D MA (RM0.77). A successful breakout above downtrend line near RM0.82 may lift the stock towards RM0.87-RM0.93 (23.6% FR) hurdles. Major supports are pegged at RM0.74-0.77 zones

Source: Hong Leong Investment Bank Research - 21 Nov 2024