TA Sector Research

Daily Brief - 30 Nov 2023

Publish date: Thu, 30 Nov 2023, 12:30 PM

Sideways to Lower Pending Better Leads

The local market drifted lower on Wednesday, with the absence of fresh market leads and current earnings reporting season restricting investor commitments. The FBM KLCI eased 1.95 points to close at 1,446.07, off an early high of 1,450.42 and low of 1,445.61, as losers beat gainers 588 to 354 on slower turnover of 3.27bn shares worth RM2.27bn.

Better Supports at 1,430/1,400; Resistance at 1,465/1,470

Stocks should continue to trend sideways with downward bias pending more definite market leads and signs of earnings recovery in the current reporting season. On the index, better support is at 1,430, with 1,400/1,390 as stronger chart supports, while the end June low of 1,370 will act as crucial support. Immediate resistance is at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle.

Bargain SunCon & UEM Sunrise

SunCon will need breakout confirmation above the 12/10/23 high (RM1.99) to fuel further upside momentum towards the 123.6%FP (RM2.13) and 138.2%FP (RM2.23) ahead, while the 61.8%FR (RM1.75) and 200-day ma (RM1.73) cushions downside. Further weakness on UEM Sunrise towards key chart supports at the 100-day ma (68sen) and 76.4%FR (64sen) will be attractive to bargain for rebound upside towards the upper Bollinger band (84sen), with tougher upside hurdles from the 123.6%FP (89sen) and 138.2%FP (97sen).

Asian Markets Lower as Investors Assess Earnings

Asian markets were traded lower on Wednesday, led by Hong Kong, while China’s benchmark index closed at its lowest level in over a month as investors assessed earnings and comments from the U.S. Federal Reserve board members. Shares of Chinese food delivery giant Meituan plunged 12% after warning of a demand slowdown for its services in its third-quarter earnings call. Chinese e-commerce giant Pinduoduo posted 94% revenue growth in the third quarter, far outpacing Alibaba’s 9% growth in the same period. The mainland Chinese CSI 300 index closed 0.86% lower at 3,488.31, falling to the lowest level since late October.

Hong Kong’s Hang Seng index tumbled 2.1% in late trading, leading losses among major Asian benchmarks. In Australia, the S&P/ASX 200 extended gains from Tuesday and climbed 0.29% to close at 7,035.3, as the country’s overall inflation rate for October slowed to 4.8%, its lowest rate since January 2022. South Korea’s Kospi slipped marginally, finishing at 2,519.81 after hitting a two-month high on Tuesday, but the small-cap Kosdaq closed 0.73% up at 822.44. Japan’s Nikkei 225 fell 0.26% to end at 33,321.22, marking three straight days of losses, while the Topix was down 0.51% and closed at 2,364.5.

Wall Street Ends Mixed as Rate Concerns Weigh

Wall Street’s main indexes ended mixed overnight as traders assessed Federal Reserve official’s commentary and economic data for future rate hike clues. The Dow Jones Industrial Average inched up 0.04% to 35,430.42. The S&P ticked down by 0.09% to 4,550.58, while the Nasdaq Composite fell 0.16% to 14,258.49. All three indexes pared initial gains after Richmond Fed President Thomas Barkin expressed skepticism that the central bank's tightening cycle is finished, keeping the option of another rate hike on the table in case inflation flares up again.

In contrast to Barkin, Fed governor Christopher Waller said there was "no reason" to insist rates stay "really high" if inflation continues to cool consistently.

Earlier in the session the Commerce Department upwardly revised its initial estimate on thirdquarter gross domestic product, which underscored U.S. economic resilience but also appeared to give the Fed little reason to start cutting rates in the near future, as long as inflation remains well above its 2% target. General Motors shares popped about 9.3% after the company announced a USD10 billion buyback and raised its dividend, and NetApp soared 15% on earnings beat.

Source: TA Research - 30 Nov 2023

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