The local market fell but ended off lows on Tuesday, mirroring weaker regional markets on economic growth worries as regional inflation data slumped. The FBM KLCI eased 1.56 points to settle at 1,449.46, off an opening high of 1,451.59 and low of 1,444.58, as losers beat gainers 492 to 369 on higher turnover of 3.54bn shares worth RM2bn.

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

Stocks should continue to trend sideways with downward bias as investors remain sidelined pending more economic clues from the region, and ahead of the closely watched US jobs data later this week. Better index chart supports are at 1,430, and 1,400/1,390, while the end June low of 1,370 will act as crucial support. Immediate resistance is still at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle.

Bargain Maybank & RHB Bank

Maybank will be attractive to bargain for recovery to the upper Bollinger band (RM9.18), with next upside hurdles from the 150%FP (RM9.32) and 161.8%FP (RM9.51) ahead, while uptrend support from the rising 100-day ma (RM8.86) cushions downside. RHB Bank is attractive to bargain at current levels for rebound upside to the 6/11/23 high (RM5.65), with a breakout to aim for the 123.6%FP (RM5.75) and 138.2%FP (RM5.90), while the 200-day ma (RM5.39) cushions downside.

Asian Stocks Slide as Focus Turn to US Jobs

Asian stocks slipped to three-week lows and Hong Kong's unloved Hang Seng index slumped to a one-year trough on Tuesday while bonds and the dollar steadied as investors tempered expectations for cuts to U.S. interest rates and waited on U.S. jobs data. South Korea’s overall inflation rate in November fell to 3.3%, compared with 3.7% expected by a Reuters poll. The inflation rate for Japan’s capital, Tokyo, came in at 2.6%, down from the 3.3% in October. Tokyo’s inflation figures are widely considered to be a leading indicator of national trends.

Hong Kong’s Hang Seng index tumbled 1.9% to its lowest since November 2022, leading losses in Asia, while the mainland Chinese CSI 300 index fell 1.9% and closed at 3,394.26, hitting fresh four-year lows. Japan’s Nikkei 225 ended down 1.37% at 32,775.82, while the Topix fell 0.84% to 2,342.69. In Australia, the S&P/ASX 200 shed 0.89% to close at 7,061.60 as the Reserve Bank of Australia held its benchmark policy rate at 4.35%, in line with expectations. South Korea’s Kospi dropped 0.82% to close at 2,494.28, and the small-cap Kosdaq lost 1.83% to close at 813.38.

Wall Street Mixed Ahead of Monthly Job Data

Wall Street’s main indexes ended mixed overnight as traders cash in on recent strength in the markets ahead of Friday's monthly jobs report for possible clues on the outlook for interest rates. The Dow Jones Industrial Average fell 0.22% to 36,124.56. The S&P inched down by 0.06% to 4,567.18, while the Nasdaq Composite gained 0.31% to 14,229.91. The early pullback on Wall Street partly reflected profit taking, with some traders looking to cash in on the recent strength in the markets. While the Federal Reserve is widely expected to leave interest rates unchanged in the coming months, traders may need more evidence to solidify hopes of a rate cut in the near future. The Labor Department's closely watched monthly jobs report, which is due to be released on Friday, could have a significant impact on the outlook for rates.

Stocks came off session lows as the U.S. 10-year Treasury yield fell below the key 4.2% level on the back of data signaling cooling in the labour market. Data showed U.S. job openings dropped in October to the lowest level since early 2021, indicating that the labour market was easing, while U.S. services sector activity picked up in November. Technology shares were boosted in particular following the data, with mega-cap tech stocks Apple and Nvidia each added nearly 2%. GitLab jumped more than 11% after the open-source software development platform beat quarterly financial expectations.

Source: TA Research - 6 Dec 2023