Sideways as Profit-Taking Consolidation Persist

Bursa Malaysia shares ended softer on Monday, as profit-taking consolidation on the property, construction and oil & gas sectors prevailed given the absence of further positive domestic catalysts. The FBM KLCI ended flat at 1,455.04 (+0.09), off an early high of 1,455.56 and low of 1,450.68, as losers beat gainers 609 to 295 on muted trade totaling 2.79bn shares worth RM1.63bn.

Supports at 1,440/1,433; Resistance at 1,465/1,470

Stocks should trade sideways with downward bias as profit-taking consolidation persist on the property and construction sectors pending positive domestic catalysts to sustain bullish momentum. The immediate index support remains at 1,440, followed by 1,433, with subsequently 1420/1,400 acting as stronger supports. Immediate overhead resistance will be at 1,465, then 1,470, with the 1,490/1,500 levels as higher resistance.

Bargain Hartalega & Kossan Rubber

A breakout confirmation on Hartalega share price above the 50%FR (RM2.21) would fuel upside momentum towards the 61.8%FR (RM2.40) and 76.4%FR (RM2.63) ahead, while the 200-day moving average (RM1.90) should act as strong support cushion. Kossan Rubber will need sustained strength above the 50%FR (RM1.41) to enhance upside momentum and target the 61.8%FR (RM1.53) and 76.4%FR (RM1.68) going forward, while the 200-day ma (RM1.23) provides strong support platform.

Asian Markets Mixed Ahead of Economic Data

Asian markets were mixed on Monday as traders remain cautious ahead of a busy week of economic data releases around the world. This week will see the release of key US reports on consumer and producer inflation as well as reports on retail sales, industrial production and consumer sentiment, all of which will provides cues on the outlook for interest rates. Separately, India will release its inflation and industrial output figures for August, while China will announce its industrial output, retail sales, and most notably, house sale prices on Friday. The escalating Sino-U.S. tensions and the potentially hawkish remarks by the Bank of Japan governor over the weekend are also weighing on the markets.

In an interview with the newspaper, Bank of Japan Governor Kazuo Ueda said the bank will seek a “quiet exit” from its ultra-dovish monetary policy. In Australia, the S&P/ASX 200 rose 0.50% and ended at 7,192.3, snapping a four-day losing streak, and the Shanghai Composite Index gained 0.84% to 3,142.78. Meanwhile, Japan’s Nikkei 225 was down 0.43%, closing at 32,467.76 while the Topix was up marginally to finish at 2,360.48. In South Korea, the Kospi rose 0.36% to 2,556.88, and the Kosdaq fell 0.18% to 912.55.

Tech Stocks Led Wall Street Rebound

Wall Street’s main indexes rose overnight as traders bought up tech shares in the wake of recent weakness and looked ahead to Wednesday's inflation data. The Nasdaq Composite rallied by 1.14% to 13,917.89. The S&P 500 gained 0.67% to 4,487.46, while the Dow Jones Industrial Average added 0.25%, to 34,663.72. The tech-laden Nasdaq led all three major U.S. stock indexes higher in the wake of last week's net losses, with electric automaker Tesla Inc providing the biggest boost to the upside. The coming days will bring data on consumer prices, producer prices and retail sales that will help investors gauge the Federal Reserve’s likely next steps in its campaign to tame inflation. The hotly anticipated CPI data will give market participants a snapshot of August inflation, and could provide some illumination regarding the duration of the U.S. Federal Reserve's restrictive policy cycle.

Bullish sentiment overnight was also helped by a Wall Street Journal report on Sunday saying there was a consensus among the Federal Reserve not to raise rates at next week’s meeting. Tesla shares jumped 10% after Morgan Stanley upgraded the stock and predicted a significant rally ahead because of breakthroughs with its autonomous software. Qualcomm shares rose nearly 4% after the semiconductor company said Monday it will supply Apple with 5G modems for smartphones through 2026. Elsewhere, Disney shares rose about 1.2% after CNBC’s David Faber reported the media conglomerate and Charter Communications have reached a deal to end their cable blackout fight.

Source: TA Research - 12 Sept 2023