The local market rebounded on Thursday as bargain hunters lifted telco, plantation and telco heavyweights from the previous day’s falls, while the broader market stayed range bound as investors await cues from global central bankers on interest rate direction. The FBM KLCI rose 4.56 points to close at 1,444.67, off an opening low of 1,441.52 and high of 1,446.75, as gainers edged losers by 500 to 421 on turnover of 3.53bn shares worth RM1.91bn.

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

Stocks should extend consolidation ahead of the weekend, as investors continue to search for more solid market leads, and caution prevails amid anticipation for clues over interest rate direction from the closely followed global central bank summit in the US. Immediate index chart supports stay at the recent low of 1,433, then 1420/1,400, while resistance will be at the recent 1,464 high and 1,470, with next upside hurdle from the 1,490/1,500 levels.

Bargain SKP Resources & VSI

SKP is still base building at current depressed levels, with downside cushioned by the 13/7/23 low (86sen), while a breakout confirmation above the 100-day ma (RM1.08) should aim for the 76.4%FR (RM1.19) and 200-day ma (RM1.32) ahead. VSI needs a convincing breakout above the 38.2%FR (97sen) to target the 50%FR (RM1.03) and 61.8%FR (RM1.10) going forward, with the 200-day ma (86sen) and 100-day ma (84sen) cushioning downside.

Asian Markets Edge Higher as Tresury Yields Retreat

Asian markets finished higher Thursday, following the broadly positive cues from global markets overnight, as a decline in yields buoyed sentiment among investors. In U.S. Treasuries, the yield on benchmark 10-year Treasury notes eased from near 16-year highs after U.S. flash purchasing managers index data for August came in softer than expected, echoing underwhelming eurozone data. A round of soft surveys on manufacturing had also revived hopes central banks were done tightening, though that might change depending on what clues about interest rates Federal Reserve Chairman Jerome Powell gives at an annual central bank summit in Jackson Hole, Wyoming.

Meanwhile, South Korea’s central bank left rates unchanged at 3.5%, while Indonesia is expected to hold its benchmark policy rate unchanged at 5.75%. In mainland, the Hang Seng index jumped 2.05% to 18,212.17, while the Shanghai Composite added 0.12% to 3,082.24. Japan’s Nikkei 225 was 0.87% up to close at 32,287.21, while the Topix climbed 0.43% to end at 2,286.59. In Australia, the S&P/ASX 200 advanced 0.47% and finished at 7,182.10. South Korea’s Kospi rebounded and closed higher by 1.28% at 2,537.68, and the Kosdaq was up 2.14% to close at 901.74.

Wall Street Tumble on Hawkish Fed Comments

Wall Street's main indexes fell sharply overnight as traders digested hawkish commentary from Fed officials suggesting interest rates will need to remain elevated for a long period of time to bring inflation down. The Dow Jones Industrial Average fell 1.08% to 34,099.42. The S&P 500 lost 1.35% to end the day at 4,376.31, while the tech-heavy Nasdaq Composite dropped 1.87% to 13,463.97. Federal Reserve Bank of Philadelphia President Patrick Harker, who in an interview on CNBC said the Fed will need to keep rates restrictive for a while. Separately, Boston Fed President Susan Collins also said it is "extremely likely" the central bank will need to hold interest rates high to bring down inflation.

Fresh economic data earlier also showed claims for U.S. unemployment benefits pointed to a still-strong jobs market, news that some say could support the Fed's hawkish message of higher interest rates for longer. Meanwhile, a rally in big tech also fizzled out as bond yields rose, with traders wading through remarks from a slew of Federal Reserve officials and awaiting Jerome Powell’s speech on late Friday for clues on the outlook for interest rates. Nvidia shares reached an all-time high after the company reported quarterly earnings and revenue that exceeded lofty analyst expectations. However, the stock closed just 0.1% higher.

Source: TA Research - 25 Aug 2023