Range Bound Pending Fresh Local Leads

Stocks closed mixed in range bound trade Tuesday, as investors stayed cautious ahead of the crucial U.S. inflation data and the final U.S. Federal Reserve meeting of the year for signals as to when policymakers will begin cutting interest rates. The FBM KLCI ended flat at 1,447.12 (+0.05) after moving between high of 1,447.72 and low of 1,444.26, as losers led gainers 483 to 388 on total turnover of 3.28bn shares worth RM2.37bn.

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

Range bound trading should persist pending more significant local catalysts, while investors await more policy updates from global central bankers this week. On the index, immediate resistance stays at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle. Better chart supports are at 1,430, and then 1,400/1,390, while the end June low of 1,370 will act as crucial support.

Bargain Gamuda & Tenaga

Gamuda need to rebuild support above the 76.4%FR (RM3.81) to enhance recovery upside to the 123.6%FP (RM4.72) and 138.2%FP (RM5.00) ahead, while stronger retracement support is found at the 61.8%FR (RM3.53). Likewise, Tenaga need to reinforce support above the 200- day ma (RM9.42) ahead of recovery potential to the 138.2%FP (RM10.39), with next hurdle from the 150%FP (RM10.65), while stronger support is at the 76.4%FR (RM9.03).

Asian Markets Creep Higher as Traders Await Fed Outlook

Asian markets crept higher on Tuesday as investors stayed cautious ahead of a crucial U.S. inflation report later in the day that will set the tone for the week filled with central bank meetings. The U.S. consumer price index will give market a sense of whether the disinflation trend is continuing. The report will be released a day before the last scheduled Federal Reserve decision of 2023, with officials widely expected to hold rates and announce their Summary of Economic Projections. The U.S. Federal Reserve is widely expected to hold rates on Wednesday, with the spotlight squarely on comments from Chair Jerome Powell during his press conference as well as the central bank's dot plot and summary economic projections.

The markets also await a slew of central bank decisions this week, including the European Central Bank, the Bank of England, the Swiss National Bank and the Norges Bank. In Australia, the S&P/ASX 200 rose 0.50%, closing at 7,235.30, and the Shanghai composite index added 0.40% to 3,003.44. Japan’s Nikkei 225 closed 0.16% higher at 32,843.7, while the broader Topix, however, lost 0.23% and finished at 2,353.16. South Korea’s Kospi climbed 0.39% to 2,535.27, while the smaller Kosdaq gained 0.51% to end at 839.53.

Wall Street Ends Higher Ahead of Fed Final Meeting of The Year

Wall Street main indices ended in green as traders digested the latest U.S. inflation reading and await the Federal Reserve's interest rate announcement and its 2024 outlook. The Dow Jones Industrial Average rose 0.48% to 36,577.94. The S&P added 0.46% to 4,643.70, while the Nasdaq Composite gained 0.70% to 14,533.40. The Labor Department's Consumer Price Index unexpectedly inched higher on a monthly basis in November, but edged lower on an annual basis, stoking concerns that inflation is taking longer to return to the Fed's 2% target than many had hoped and spurred speculation that Jerome Powell will possibly try to throw cold water on the policy-easing buoyancy. With the Fed widely expected to keep its target rate range steady for the third straight meeting at 5.25% to 5.5%, traders will carefully scrutinize any signals from Powell on the path for policy.

The Fed is also expected to release its Summary Economic Projections and dot plot, which should shed light on the central bank's path forward. Markets have priced in a near 100% chance that the Federal Reserve holds rates steady and many believe the next move for the Federal Reserve will be an interest rate cut in 2024, not a hike. In a busy week for central banks elsewhere, the European Central Bank and the Bank of England are also due to issue interest rate decisions on Thursday. Energy stocks restricted gains for the S&P 500, with the sector led into the red by Occidental Petroleum, Marathon Oil and Devon Energy. All were down more than 2% in the session.

Source: TA Research - 13 Dec 2023