Sideways Pending Fresh Leads to Extend Recovery

Bursa Malaysia shares eased into profit-taking consolidation on Monday, due to lacking local leads and despite the firmer regional tone on hopes the US is done raising interest rates following recent softer inflation data. The FBM KLCI slid 3.75 points to close at 1,456.92, off an opening high of 1,460.26 and low of 1,454.12, as losers beat gainers 499 to 395 on total turnover of 3.23bn shares worth RM1.7bn.

Resistance at 1,465/1,470; Support at 1,450/1,430

Stocks should trade sideways pending fresh leads for the local market to extend recovery from current consolidation. Immediate index resistance is set at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle, while immediate support is at 1,450, with 1,430, and then 1,400/1,390 as stronger chart supports.

Bargain Supermax & Top Glove

Supermax will need convincing breakout above the April peak (RM1.03) to fuel upside momentum towards RM1.10, RM1.20 and RM1.30 ahead, while downside risk is cushioned by the 200-day ma (83sen). Meanwhile, Top Glove need confirmed breakout above the 200-day ma (88sen) to aim for 95sen, RM1.10 and RM1.25 going forward, with key chart supports at 70sen and 64sen cushioning downside.

Asian Markets Rise as Rate Worries Abate

Stock markets in Asia traded higher on Monday after recent U.S. economic data boosted bets that the Federal Reserve was done with its rate hike campaign. Data pointing to a slowing jobs market in the U.S. and a weaker-than-expected consumer inflation report last week reignited hopes that the Fed could begin easing monetary conditions sooner than expected. Investors now look forward to minutes from the U.S. central bank's last meeting later this week for more clarity on its interest rate path. Markets have all but priced out the risk of a further hike in December or next year, and imply a 30% chance of an easing starting in March.

On economic front, China left benchmark lending rates unchanged at a monthly fixing on Monday, matching expectations, as a weaker yuan continued to limit further monetary easing and policymakers waited to see the effects of previous stimulus on credit demand. South Korea’s Kospi rose about 0.86% to close at 2,491.2, while the small-cap Kosdaq saw a larger gain of 1.75% to end at 813.08. In Australia, the S&P/ASX 200 gained 0.13% to finish at 7,058.40, and the Shanghai composite index added 0.46% to 3,068.32. However, Japan’s Nikkei 225 fell 0.59% to 33,388.03.

Source: TA Research - 21 Nov 2023