Bursa Malaysia shares eked out slight gains on Wednesday, as mild buying interest in selected blue-chip heavyweights offered support amidst the more cautious broader market, while key regional markets finished mixed after weak economic data in China and Europe heightened concerns over global growth. The FBM KLCI inched higher by 5.79 points to settle at 1,460.62, off a high of 1,463.04 and low of 1,454.25, as gainers led losers 531 to 380 on trade totaling 4.17bn shares worth RM2.12bn.

Support at 1,440/1,433; Resistance at 1,464/1,470

Trading is expected to stay choppy on concerns over the path of interest rates and a lack of new stimulus from Beijing to keep investors on edge. Immediate index support cushioning downside will be at 1,440, then 1,433, with stronger subsequent support at 1420/1,400, while overhead resistance stays at 1,464/1,470, with next tougher resistance seen at the 1,490/1,500 level.

Bargain Duopharma & Pharmaniaga

Further weakness on Duopharma shares would aggravate oversold technical momentum and call for rebound upside towards the 38.2%FR (RM1.27), with tougher hurdle from the 50%FR (RM1.35), while crucial support from the 23/6/22 low (RM1.04) cushions downside. Pharmaniaga will need convincing breakout above the 50%FR (46sen) to fuel further upside towards the 61.8%FR (51sen), with next hurdle at 76.4%FR (58sen), and downside cushioned by the 23.6%FR (33sen).

Asian Markets Mixed Over Economic Growth and Rate Worries

Asian markets were mixed Wednesday, following the broadly negative cues from global markets overnight, amid concerns about global economic slowdown after release of disappointing data that showed weak services activity in China and slowing eurozone business activity. A private-sector survey on Tuesday showed China's services activity expanded at the slowest pace in eight months in August, reflecting weak demand. Manufacturing data from Germany, Britain and the euro area also showed declines, while their service sectors fell into contraction. Traders were also digesting recent signals on potential U.S. interest rate hikes. Fed Governor Christopher Waller said on Tuesday that the latest round of economic data was giving the U.S. central bank space to see if it needs to raise rates again.

Hong Kong-listed shares of Chinese property stocks surged, with Evergrande leading the charge, soaring by more than 70%. In Australia, the S&P/ASX 200 lost 0.78% and closed at 7,257.10, after the country recorded a 2.1% year-on-year growth in its second-quarter gross domestic product, slightly higher than expectations from economists polled by Reuters. Separately, South Korea’s Kospi was down 0.73% and ended at 2,563.34, with the Kosdaq also reversing earlier gains to fall 0.38%, finishing at 917.95. Elsewhere in Asia, Japan’s Nikkei 225 rose 0.62% to 33,241.02, while the Shanghai Composite Index inched higher by 0.12% to 3,158.08.

Wall Street Slides as Economic Data Stokes Inflation Worries

The major U.S. indexes all ended the day lower after stronger-than-expected U.S. services sector data suggested inflation pressures remain. The Dow Jones Industrial Average fell 0.57% to 34,443.19. The S&P 500 lost 0.70% to 4,465.48 and the Nasdaq Composite dropped 1.06% to 13,872.47. The continued weakness on Wall Street partly reflected ongoing concerns about the outlook for the global economy following the recent release of disappointing data from overseas. Stocks saw further downside following the release of a report from the Institute for Supply Management showing an unexpected acceleration in the pace of U.S. service sector growth in the month of August. With the Fed's Sept. 20 meeting on the horizon, traders are debating whether those price pressures will convince policymakers to keep rates higher for longer.

In other U.S. economic news, the Commerce Department released a report showing the U.S. trade deficit widened in the month of July. Elsewhere, the latest Beige Book from the Fed indicated that the U.S. economy saw modest growth in July and August, and slowing price growth. Apple Inc. led a slide in big tech amid higher bond rates. The company also dropped on a news report that Chinese agencies are barring the use of iPhones at work. Along with Apple, Amgen and Boeing fell about 2% each, weighing on the Dow. The S&P 500's IT sector was its worst performer, falling more than 1%.

Source: TA Research - 7 Sept 2023