Ongoing rebound may face stiff hurdles at 1,610-1,625 amid the peak results season and persistent foreign outflows

KLCI: 1603.15 (5.7)
DOW: 44860.31 (123.7)
MSCI Asia: 182.41 (-1.2)
FCPO (RM): 4745 (10)
BRENT (USD): 72.81 (-0.2)
USDMYR: 4.458 (0.005)
SGDMYR: 3.3078 (0.003)
EURMYR: 4.6843 (0.013)
AUDMYR: 2.8909 (-0.01)
GBPMYR: 5.6041 (0.007)
US: 10-yr yield (%) 4.3062 (0.033)
BNM:10-yr yield (%) 3.806 (-0.011)

Asia/US. Ahead of the FOMC meeting minutes and major US PCE inflation data (Nov 27), Asian markets ended mostly lower after Trump said the US will impose additional tariffs of 10% on all Chinese goods and a 25% tariff on imports from Mexico and Canada, ratcheting up concerns about his MAGA policies and global trade tensions. The Dow tumbled as much as 310 pts before closing +124 pts at 44,860 (its 5th consecutive gain and a fresh record high) as investors digested Trump’s tariff threat, Israel-Hezbollah cease-fire deal and the latest Nov FOMC minutes that called for a more measured approach in rate cuts. 

Malaysia. Bucking lower regional markets and persistent foreign net outflows, KLCI rose 5.7 pts to 1,603.2 (its 3rd consecutive gain) after plunging 96 pts from 52W high at 1,684 to 1,588 (Nov 22). However, market breadth remained negative for the 5th day at 0.71 vs 0.93 previously, with daily volume stood at 2.54bn shares (Nov avg: 2.86bn) valued at RM2.37bn (Nov avg: RM2.60bn). Foreign institutions emerged as the major net sellers for the 5th consecutive day (-RM320m, Nov: -RM1.42bn, YTD: +RM357m) while local retailers (+RM4m, Nov: -RM268m, YTD: -RM4.99bn) alongside local institutions (+RM316m, Nov: +RM1.69bn, YTD: +RM4.64bn) were the major net buyers. 

Outlook Given the final leg of Nov results season and continued foreign net outflows (Nov: -RM1.42bn, Oct: -RM1.77bn), KLCI is likely to consolidate in the near term. Additionally, geopolitical tensions, Fed’s rate-cuts uncertainty, China’s weak growth, and Trump 2.0’s MAGA policy, may escalate market volatility and cap oversold rebound near 1,610-1,625 -1,648 (support: 1,580-1,588) levels.

Source: Hong Leong Investment Bank Research - 27 Nov 2024