Consolidate With Downward Bias

Stocks traded sideways on Thursday, tracking the performance of regional peers as sentiment weakened after the latest US Federal Reserve meeting minutes showed a cautious approach to future interest-rate moves. The FBM KLCI fell 2.60 points to close at 1,453.29, off an opening high of 1,456.68 and low of 1,451.35, as losers beat gainers 533 to 417 on total turnover of 3.70bn shares worth RM2.08bn.

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

The local market should remain in consolidation mode with downside bias ahead of the weekend given the lack of positive catalyst on the local front, while investors closely monitor the economic data for clues on inflation trajectory. Immediate index resistance stays at

1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle, while immediate support remains at 1,450, with 1,430, and then 1,400/1,390 as stronger chart supports.

Bargain Maxis & TM

Maxis needs breakout confirmation above the 16/06/23 high (RM4.50) to enhance upside potential towards the 123.6%FP (RM4.86) and 138.2%FP (RM5.08) ahead, while key supports are at the 50%FR (RM3.74) and 38.2%FR (RM3.56). Likewise, TM will need convincing breakout above the 76.4%FR (RM5.47) to target the 25/08/22 peak (RM5.80) and 123.6%FP (RM6.13) ahead, while retracement supports are at the 38.2%FR (RM4.93) and 23.6%FR (RM4.73).

Asian Markets Subdued as Fed Cautious Policy Stance Weigh

Shares in Asia traded within narrow ranges Thursday as the Fed’s cautious approach keep traders on the sidelines. Federal Reserve officials agreed at their last policy meeting they could take a cautious approach to raising U.S. interest rates moving forward, and would only need to move them higher "if" incoming information showed insufficient progress in lowering inflation. Traders are also looking to Chinese policymakers for clues on possible support for the long-suffering property market, in line with broader growth targets they are hammering out. On economic front, Australia saw its business activity contract at a faster pace in November, according to flash estimates from Judo Bank.

Meanwhile, oil extended losses in Asia after falling close to 1% in the previous session on news that the OPEC+ group of oil producing countries would delay a meeting, reducing the likelihood of an imminent production cut to buoy prices. Australia’s S&P/ASX 200 was down 0.62% and ended at 7,029.20, extending losses from the day before. South Korea’s Kospi rose 0.13% to 2,514.96, and the Shanghai composite index added 0.60% to 3,061.86. The Japanese market is closed on account of Workers Day.

Europe Ends Higher as Traders Digest Economic Data

Major European markets closed slightly higher as traders digest economic data from the region and minutes from European Central Bank. The pan-European STOXX 600 index rose 0.27% to 458.47. Germany's DAX gained 0.23% to finish at 15,994.73, while the FTSE in London added 0.19% to close at 7,483.58 and the CAC 40 in France gained 0.24% to 7,277.93. U.S. markets are closed for Thanksgiving holiday. Preliminary purchasing managers’ index data from the euro zone for November showed employment fell for the first time in nearly three years. Business activity continued to decline, though the rate of contraction slowed in output and new business.

Meanwhile, the minutes from ECB's October meeting showed the policymakers insisted that a further rate hike should be kept on the table, even if further tightening was not their main scenario. Separately, Turkey's central bank announced a further massive hike in the key interest rate with the aim of ensuring a decline in the underlying trend of inflation and return it to the 5% target in the medium term. The Monetary Policy Committee of the Central Bank of the Republic of Turkey, or CBRT, headed by Governor Hafize Gaye Erkan, decided to hike the policy rate from 35% to 40%.

Source: TA Research - 24 Nov 2023