Profit-taking emerged to reverse early gains Wednesday, as investors reduced trading commitments ahead of the Merdeka Day holiday break, but the technology (+1.4%), property (+1.1%) and construction (+0.9%) sectors rose to outperformed the broader market. The FBM KLCI lost 2.5 points to end at the day’s low of 1,451.94, off an intra-day high of 1,462.8, as gainers equal losers at 499 on robust trade totaling 4.9bn shares worth RM4.75bn.

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

Property and construction stocks should continue to shine in the near-term amid keen anticipation for announcements on key infrastructure projects or stimulus measures to boost the sector, while on the external front, investors will be awaiting the closely watched monthly U.S. jobs data by the end of the week for clues on the health of the US economy. Immediate index resistance remains at the recent 1,464 high and 1,470, with next hurdle from the 1,490/1,500 level, while immediate support stays at the recent low of 1,433, then 1420/1,400.

Bargain Maybank & RHB Bank

Maybank will need convincing breakout above the 123.6%FP (RM9.18) to fuel upside momentum and aim for the 138.2%FP (RM9.43), 150%FP (RM9.62) and 161.8%FP (RM9.82) going forward, while downside is capped by uptrend support from the 100-day ma (RM8.77). RHB Bank needs to climb above the upper Bollinger band (RM5.74) to sustain upward momentum towards the 123.6%FP (RM5.90) and 138.2%FP (RM6.06), while the 100-day ma (RM5.50) also provide strong uptrend support.

Asian Markets Mixed as China’s Factory Activity Contracts

Asian markets were mixed Thursday as China’s factory activity contracted for a fifth straight month in August. The official manufacturing purchasing managers index came in at 49.7, representing a softer rate of contraction compared with the 49.4 expected by economists polled by Reuters and July’s figure of 49.3. Hong Kong’s Hang Seng index slid 0.55%, paring earlier gains. Mainland Chinese stocks were also in negative territory, with the CSI 300 index down 0.61% and closing at 3,765.27. Japan’s Nikkei 225 advanced 0.88% and notched a fourday winning streak, closing at 32,619.34. The Australian S&P/ASX 200 extended gains, rising 0.1% and marking four straight days of gains this week. However, South Korea’s Kospi fell 0.19% to 2,556.27 as industrial production slid 8% year-on-year in July, marking its 10th straight month of contraction.

Wall Street End Mixed on Inflation Data

The S&P 500 ended lower and the Nasdaq higher overnight after U.S. inflation data matched estimates, underscoring expectations the Federal Reserve could pause its monetary tightening, while Salesforce climbed following an up upbeat forecast. The Nasdaq reached its highest in over four weeks after a Commerce Department report showed the Personal Consumption Expenditures price index, considered the central bank's preferred inflation gauge, climbed 3.3% in July on an annual basis, in line with expectations. Excluding volatile food and energy components, the core PCE price index rose 4.2% in July, year-on-year, also in line with estimates. Investors are awaiting more comprehensive non-farm payrolls data due on Friday for greater clarity on the Fed's likely monetary path.

The most traded stock in the S&P 500 was Tesla, with USD27.7 billion worth of shares exchanged during the session. The electric car maker's shares rose 0.46%. Salesforce rallied 3% following upbeat revenue forecasts from the cloud-based software provider as it benefits from price hikes and a resilient demand. Weekly jobless claims for the week ended Aug. 26 fell to 228,000, compared with estimates of 235,000 claims, reining in investor sentiment, the Labor Department said in a report. The S&P 500 declined 0.16% to end at 4,507.66 points. The Nasdaq gained 0.11% to 14,034.97 points, while Dow Jones Industrial Average declined 0.48% to 34,721.91 points. For the month, the S&P 500 fell 1.8%, the Dow fell 2.4% and the Nasdaq fell 2.2%.

Source: TA Research - 1 Sept 2023