Jittery mood prevails amid peak results season, geopolitical risks and continued net outflows by foreigners 

KLCI: 1588.68 (-9.5)
DOW: 43870.35 (461.9)
MSCI Asia: 182.04 (-0.7)
FCPO (RM): 4708 (-64)
BRENT (USD): 74.23 (1.42)
USDMYR: 4.463 (-0.008)
SGDMYR: 3.3235 (-0.007)
EURMYR: 4.6935 (-0.026)
AUDMYR: 2.9072 (-0.004)
GBPMYR: 5.6427 (-0.022)
US: 10-yr yield (%) 4.4218 (0.012)
BNM:10-yr yield (%) 3.823 (0.015)

Asia/US. Asian markets ended mostly lower as underwhelming guidance from AI bellwether NVDA provided middling cues, alongside heightened tensions over Russia and Ukraine. The Dow settled +1.06% to 43,870 while the Nasdaq inched up 0.04% at 18,793 as investors shifted toward Trump trades that are expected to benefit from a strengthening economy, stepping away from technology shares, following disappointing guidance from NVDA and antitrust issues from GOOG. On the economic front, weekly jobless claims fell to 7M low at 213k, signalling a resilient labour market while Fed speak warns US economy now is more susceptible to inflation shocks as businesses prepare for potential economic shifts under Trump 2.0. The latest expectations for no rate hike in the Dec meeting jumped to 44% from 28% a week ago. 

Malaysia. In tandem with the sluggish Wall St and regional markets coupled with persistent net outflows by foreigners, KLCI fell 9.5 pts to 1,588.7. Market breadth deteriorated to 0.55 vs 0.84 previously while trading volume jumped 26% to 3.44bn shares valued at RM2.50bn. Foreign institutions emerged as the major net sellers (-RM134m, Nov: -RM849m, YTD: +RM930m) whilst local institutions (+RM122m, Nov: +RM1.04bn, YTD: +RM3.99bn) alongside local retailers (+RM12m, Nov: -RM195m, YTD: -RM4.92bn) were the major net buyers. 

Outlook In wake of the Nov results season and continued foreign net outflows (Nov: -RM849m, Oct: -RM1.77bn), KLCI is likely to consolidate further (support: 1,566-1,580; resistance: 1,600-1,610-1,630) 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.   

Source: Hong Leong Investment Bank Research - 22 Nov 2024