Bursa Malaysia shares traded range bound with investors sidelined pending release of key economic data from China and the US in the later part of the week. The FBM KLCI ended up 0.6 points at 1,445.81, after ranging between early low of 1,442.13 and high of 1,449.38, as losers beat gainers 482 to 330 on total turnover of 3.13bn shares worth RM1.34bn.

Supports at 1,433/1,420; Resistance at 1,464/1,470

The local market should continue to trade sideways as investors await data to assess the health of key global economies, and consolidate their position ahead of this weekend’s keenly watched state elections. Immediate index support cushioning downside will be last week’s low of 1,433, with stronger supports seen at 1,420 and 1,400, while immediate overhead resistance will be last week’s high of 1,464, with 1,470, and the 1,490/1,500 level acting as tougher upside hurdles.

Bargain Genting Berhad & GENM

Genting Berhad is in base building phase, pending decisive breakout above the 200-day ma (RM4.44) to fuel upside momentum towards the 76.4%FR (RM4.62) and the 19/3/21 high (RM5.20) ahead, with key retracement support from the 50%FR (RM3.97) cushioning downside. GENM will need breakout confirmation above the 61.8%FR (RM2.67) to enhance upside pontential towards the 76.4%FR (RM2.81) and RM2.90 going forward, with the 38.2%FR (RM2.44) cushions downside.

Asian Markets Slip Ahead of China Data

Shares in Asia largely fell on Monday as traders look ahead to China’s inflation figures and trade balance later this week. China will release its trade balance for Tuesday and inflation data on Wednesday, which will give clues to the country’s recovery trajectory. The market is looking for further signs of deflation with annual consumer prices seen down around 0.5%, and producer prices falling 4%. Separately, traders also reacted to data showing less than expected employment growth in the U.S. and Canada in July, which eased concerns about the outlook for interest rates and raised expectations the central banks will soon end their policy tightening. Most economists still expect another pause in interest rate hikes.

In Australia, the S&P/ASX 200 slid 0.22% to finish at 7,309.20. South Korea’s Kospi was down 0.85% to close at 2,580.71, marking its fourth straight day of losses, while the Kosdaq saw a larger loss and tumbled 2.2% to end at 898.22. The Shanghai Composite lost 0.59% to 3,268.83, while the Shenzhen Component fell 0.83% to 11,144.91. However, Japan’s Nikkei 225 was up 0.19% and closed at 32,254.56, erasing earlier losses in the day, and the Topix was up 0.41% to end at 2,283.93.

Wall Street Ends Higher as Traders Digest Earnings

Wall Street’s major indexes rose overnight as traders digest corporate earnings and await U.S. and Chinese inflation data that could test the stock market's recovery this year. The Dow Industrial Average rose 1.16% to close at 35,473.13. The S&P 500 advanced 0.90% to close at 4,518.44, while the Nasdaq Composite added 0.61% to 13,994.40. A climb in the shares of Berkshire Hathaway and other blue-chip companies led markets higher overnight, helping Wall Street bounce back from a stretch of losses. Berkshire Hathaway climbed more than 3%, signaling traders’ satisfaction with the company’s earnings report and cash stockpile. Both A and B share classes of Berkshire Hathaway closed at record levels on Monday. Later in the week, traders will shift focus to the release of July consumer and producer price index data. Both are closely watched given their connection to the path of inflation and the health of the economy.

Data on the U.S. consumer price index is forecast to show headline inflation picking up slightly in July to an annual 3.3%, while the core rate is seen unchanged at 4.8%, according to a Reuters poll of economists. Inflation has slid toward the Fed’s 2% target, but traders are leery that the final mile could prove tricky and policy makers could keep rates restrictive for months to come. Amgen rose nearly 4%. Boeing gained 3%, while United Health, J&J, Walmart, Caterpillar and IBM rose between 1.5 to 2.1%, respectively. Of the 85% of companies in the S&P 500 that have posted their quarterly results, about four-fifths have exceeded Wall Street forecasts, according to FactSet.

Source: TA Research - 8 Aug 2023