Overnight US Rebound to Revive Local Market

Stocks drifted lower Tuesday, as sentiment on the local front remained negative amid lack of positive catalysts, but key regional markets mostly rose as investors look ahead to U.S. economic data that will provide clues to the next steps from the U.S. Federal Reserve. The FBM KLCI lost another 2.47 points to close at 1,435.65, after ranging between high of 1,440.28 and low of 1,430.15, but gainers beat losers 511 to 348 on total turnover of 2.93bn shares worth RM1.94bn.

Support at 1,400/1,390; Resistance at 1,450/1,465

The overnight rebound on Wall Street should revive the local market today, but undertone remains cautious given rising geopolitical concerns abroad as well as lack of domestic positive catalysts. As for the index, immediate support will be at 1,400, with 1,390, and the end June low of 1,370 acting as crucial supports. Immediate overhead resistance remains at 1,450, with 1,465/1,470, and the 1,490/1,500 area acting as tougher upside hurdles, going forward.

Bargain Velesto & Wasco

Velesto is attractive to bargain for recovery upside towards the 27/02/23 high (28sen), with a convincing breakout above the 30sen to target the 123.6%FP (34sen) going forward. Crucial support is from the 61.8%FR (20ssen). Likewise, Wasco looks attractive to bargain at current levels for rebound upside towards the 138.2%FP (RM1.10), while a confirmed breakout should aim for the 150%FP (RM1.15) and 161.8%FP (RM1.20) ahead. Support from the 76.4%FR (83sen) and 61.8%FR (77sen) limits downside risk.

Asian Markets Reversed Loses as Traders Await U.S. Data

Asian markets reversed early losses to end mostly higher on Tuesday, as traders awaited key U.S. economic data and kept an eye on geopolitical developments in the Middle East and global bond yields. Market attention now turns to some of the last bits of U.S. economic data before the Fed's meeting on Oct. 31 - Nov. 1, with the flash purchasing managers' index (PMI) out on late Tuesday and gross domestic product due on Thursday. The Fed is expected to hold rates at its meeting next week. The European Central Bank is also expected to leave interest rates untouched at their meeting on Thursday, after raising its key interest rates 25 basis points in September.

Traders also remained nervous that the Israel-Hamas war could escalate into a wider conflict in the oil-exporting region, causing potential supply disruptions. South Korea’s Kospi closed 1.12% up at 2,383.51, while the Kosdaq surged 2.77% to 784.86. Japan’s Nikkei 225 rebounded as well and climbed 0.2% to end at 31,062.35, and the Topix closed marginally up at 2,240.73. In Australia, the S&P/ASX 200 gained 0.19% to 6,856.90. In mainland, the Shanghai Composite index rose 0.78% to 2,962.24, but the Hong Kong’s Hang Seng index fell 1.05% to 16,991.53.

Source: TA Research - 25 Oct 2023