Resurgent Infrastructure Play to Fuel Momentum

Blue chips surged on Thursday, led by the utility, construction and property sectors, on investor optimism over domestic infrastructure spending to fuel economic growth. The FBM KLCI surged 14.89 points, or 1.02 percent, to end at a fresh 11-month high of 1,477.26, off an early low of 1,461.03, as gainers led losers 630 to 424 on robust turnover of 6.37bn shares worth RM3.82bn.

Resistance at 1,490/1,500; Supports at 1,450/1,440

Resurgent buying interest in sectors deemed to benefit from infrastructure spending to boost domestic economic growth should continue to fuel momentum plays. The index will need to decisively overcome the 1,490/1,500 resistance which capped upside in Jan 2023, to aim for next hurdles at 1,520 and 1,550. Immediate support remains at 1,450, with better supports at 1,440 and 1,430.

Bargain Genting Berhad & GENM

Genting Berhad need sustained strength above the upper Bollinger band (RM4.71) to enable challenge of the 19/3/21 high (RM5.13), with a breakout to aim for RM5.40 and the 123.6%FP (RM5.71) ahead, while the 200-day ma (RM4.32) cushions downside. Genting Malaysia will need decisive breakout above the 19/3/21 peak (RM2.96) to fuel further upside momentum towards RM3.10 and the 123.6%FP (RM3.26) going forward, with the 200-day ma (RM2.54) also capping downside risk.

Asian Markets Fall on China Woes, U.S. Rate Concerns

Asian markets fell on Thursday, with weakness in China adding to the risk-off mood after Federal Reserve meeting minutes indicated interest rates will remain elevated for longer. China stocks remained under pressure, with uncertainties about a recovery in the world's second-biggest economy keeping investors on the fence. Markets in Asia also took cues from global stocks after minutes of the U.S. Federal Reserve’s meeting in December showed interest rate cuts were likely in 2024, but provided little clarity on when that might happen. Attention will now turn to upcoming US jobs data on Friday after minutes from the Fed’s December meeting suggested rates could remain at restrictive levels “for some time.”

Markets are now pricing in a 70% chance of the Fed cutting rates in March compared to 90% a week earlier, according to CME Fed-Watch tool. South Korea’s Kospi dropped 0.78% to 2,587.02, while the small-cap Kosdaq fell 0.61% to end at 866.25. In Australia, the S&P/ASX 200 retreated further, losing 0.39% to close at 7,494.10, and the Shanghai composite index lost 0.43% to 2,954.35. The benchmark Nikkei 225 shed 0.53% to 33,288.29, but the broader Topix reversed losses to edge up 0.52% to 2,378.79, as Japan kicked off its first day of trade in 2024.

Nasdaq Extend Losses Amid Fed Uncertainty

The Nasdaq Composite closed lower for the fifth trading day in a row as equities struggled to shake off a dismal start to the year and Federal Reserve policymakers left hopes for an early interest rate cut hanging. The Dow Jones Industrial Average inched higher by 0.03% to 37,440.34. The S&P 500 slid 0.34% to 4,688.68, while the Nasdaq Composite dipped 0.56% to end at 14,510.30. Traders looking for confirmation of bets on a March rate cut got uncertainty instead in the Fed minutes released Wednesday. While officials agreed rates had reached a peak and should be lower by the end of 2024, some signaled that they could stay at their historically high levels "for some time" depending on the path of inflation.

The weakness on Wall Street also came as traders expressed caution ahead of the release of the Labor Department's closely watched monthly jobs report on late Friday. Ahead of the Labor Department report, payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of December. A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits fell by much more than expected in the week ended December 30th.

Source: TA Research - 5 Jan 2024