Consolidate Ahead of Long Deepavali Weekend Break

Blue chips eased further for profit-taking consolidation on Thursday, as traders await comments from US Fed officials for clues on interest rate policy. The FBM KLCI lost another 5.33 points to close at 1,452.27, off an early high of 1,457.84 and low of 1,450.64, as losers edged gainers 470 to 439 on turnover of 3.32bn shares worth RM1.94bn.

Support at 1,450/1,430; Resistance at 1,490/1,500

The local market should extend consolidation with investors likely to be sidelined ahead of the long Deepavali weekend break, as hopes global interest rates may have peaked help cushion downside. Immediate index support will be 1,450, with 1,430, and then 1,400/1,390 as stronger support platform. Resistance is set at the 1,490/1,500 area, followed by 1,520 as next upside hurdle.

Bargain Maybank & RHB Bank

Maybank will need to sustain above the 138.2%FP (RM9.13) to enhance upside momentum towards the 150%FP (RM9.32) and 161.8%FP (RM9.51) ahead, with uptrend support from the rising 50-day ma (RM8.92) cushioning downside. RHB Bank need to convincingly overcome the 123.6%FP (RM5.75) to aid further upside and target the 138.2%FP (RM5.90) and 150%FP (RM6.02) going forward, while the 50-day ma (RM5.54) provides good uptrend support.

Most Asian Markets Higher on Rate Optimism

Most Asian markets edged higher on Thursday, as traders cling to hopes that interest rates have peaked. Markets were relatively calm following recent volatility with traders pricing in almost no chance of an interest-rate increase in December, and no further hikes next year. Those forecasts come ahead of comments from central bankers. Fed Chair Jerome Powell will appear on a panel discussing monetary policy challenges on late Thursday. Meanwhile, the U.S weekly jobless claims will be closely watched as an indicator of the how the country's labor market is performing.

On economic news, government data showed October consumer prices shrank 0.2% yearon-year in China, more than the 0.1% fall expected by economists polled by Reuters. Japan’s Nikkei 225 added 1.49% to 32,646.46, and the Topix gained 1.26% to 2,335.12. South Korea’s Kospi also rose 0.23% to 2,427.08, while the Kosdaq shed 1% to 802.87. In Australia, the S&P/ASX 200 ended 0.28% higher at 7,014.90, while the Shanghai composite index closes nearly unchanged at 3,053.28.

Wall Street Falls as Traders Weigh Powell Remarks

Wall Street’s main indexes closed lower overnight as bond yields rallied after Federal Reserve Chair Jerome Powell said higher interest rates might be needed to tame inflation. The Dow Jones Industrial Average lost 0.65% to 33,891.94. The S&P 500 fell 0.81% to finish the session at 4,347.35, while the Nasdaq Composite dropped 0.94% to 13,521.45. The weakness on Wall Street came after Federal Reserve Chair Jerome Powell indicated more work may need to be done to bring down inflation, although the recent slowdown in pace has been an encouraging sign for policymakers. Traders do not expect the Fed to vote for additional hikes, but the majority of the rate-setting committee has penciled in one more rate hike this year, leaving the last meeting in mid-December a possibility.

A weak sale of government bonds also weighed on sentiment, raising concern about the market’s ability to absorb new debt. The benchmark 10-year Treasury yield was up more than 12 basis points at 4.636%. The 30-year bond rate jumped about 11 basis points to 4.771%. On economic front, data showed the number of Americans filing new claims for unemployment benefits edged down last week, signaling layoffs remain low even as the jobs market shows some signs of cooling.

Source: TA Research - 10 Nov 2023