Blue Chip to Find Support From Window-Dressing

Bursa Malaysia shares rose further Monday on optimism for an end to the global interest rate hike trend, but eased off highs as investors took some profits from the recent strong gains. The FBM KLCI added 2.83 points to close at 1,465.28, after moving between early low of 1,460.42 and high of 1,468.74, as losers beat gainers 504 to 419 on robust turnover of 4.81bn shares worth RM3.02bn.

Break Above 1,470 to Aim for 1,490/1,500

Stocks should ease for near-term profit-taking consolidation as investor optimism for global interest rate cuts next year cools, but blue chips should find support on dips from windowdressing interest ahead of the year-end. The index will need breakout confirmation above the 1,465/1,470 immediate resistance area to promote further rise to the 1,490/1,500 next resistance area. Immediate support is at 1,450, with better chart supports at 1,430, and then 1,400/1,390.

Bargain Genting Berhad & GENM

Genting Berhad will need to overcome profit-taking resistance from the upper Bollinger band (RM4.81) and 76.4%FR (RM4.92) to enhance upside momentum towards tougher hurdles at RM5.10 and RM5.40, while the 200-day ma (RM4.36) and 100-day ma (RM4.31) cushion downside. Genting Malaysia need breakout confirmation above the 50%FR (RM2.76) to improve upside potential towards the 61.8%FR (RM2.84) and 76.4%FR (RM2.95) ahead, with the 200-day ma (RM2.57) and 100-day ma (RM2.55) capping downside risk.

Asian Markets Slip as Rate Concerns Persist

Stocks in Asia fell on Monday after Federal Reserve officials pushed back against bets of aggressive interest rate cuts next year. New York Fed President John Williams led a chorus of officials in saying it’s too early to begin thinking about lowering borrowing costs. Separately, Atlanta Fed President Raphael Bostic, who votes on monetary policy next year, told Reuters that he expects two rate cuts in 2024 but not starting until the third quarter. In Europe, European Central Bank Governing Council Joachim Nagel said it’s too early to be considering rate cuts, while ECB President Christine Lagarde said the bank had not discussed rate cuts at all. Attention will soon shift to Japan with the nation’s central bank beginning a two-day policy meeting Monday.

Elsewhere this week, the Reserve Bank of Australia will release its minutes from the December policy meeting while Bank Indonesia will make its final policy decision of the year. In Australia, the S&P/ASX 200 closed 0.22% lower at 7,426.40, snapping a six-day winning streak, and the Shanghai composite index fell 0.40% to 2,930.80. Japan’s Nikkei 225 also dropped 0.64% to 32, 758.88, while the Topix fell 0.66% to 2,316.86. Meanwhile, South Korea’s Kospi reversed earlier declines to rise 0.13% to 2,566.86, and the Kosdaq rose 1.51% to 850.96.

Wall Street Extend Gains as Rate Optimism Prevail

Wall Street's main indexes closed slightly higher overnight as traders largely ignored tempered messaging from Federal Reserve officials and looked ahead to a week of crucial economic data. The Dow Jones Industrial Average was little changed, gaining just 0.86 points, to 37,306.02. The S&P 500 climbed 0.45% to 4,740.56, while the tech-heavy Nasdaq Composite advanced 0.61% to 14,904.81 Traders became increasingly convinced the Federal Reserve would make more rate cuts in 2024 than previously forecast. However, Fed officials have pushed back against bets on deeper and faster rate cuts. Chicago Fed President Austan Goolsbee and Cleveland Fed President Loretta Mester were the latest to join a growing chorus of central bank officials tempering market optimism after their New York counterpart John Williams last week said bets on a March reduction were premature.

While some Fed officials have pushed back against the idea of imminent rate cuts, traders still widely expect the central bank to lower rates as early as March. Later in the week, as the Christmas holiday draws near, the Commerce Department is expected to release its third and final take on third-quarter GDP on Thursday, to be followed by its broad-ranging Personal Consumption Expenditures report on Friday, which will cover income growth, consumer spending, and crucially, inflation. Of the 11 major sectors in the S&P 500, communication services were up the most, with real estate suffering the biggest percentage drop.

Source: TA Research - 19 Dec 2023