Range bound trade persisted on the local bourse Thursday, with investors sidelined amid caution over US interest rates sustaining at current levels and the weaker Chinese economy. The FBM KLCI eased 0.75 points to close at the day’s low of 1,512.36, off an early high of 1,521.18, but gainers led losers 574 to 361 on improved turnover of 3.24bn shares worth RM1.99bn.

Supports at 1,493/1,482; Resistance at 1,520/1,550

Stocks should extend the recent sideways trend on muted trade as market players wind down further ahead of the extended Chinese New Year holiday break. Key index supports cushioning downside will be at 1,493, 1,482 and 1,467, the respective rising 30-day, 50-day and 100-day moving averages, while immediate overhead resistance remains at 1,520, with stronger upside hurdles at 1,550 and 1,580.

Bargain Supermax & Top Glove

Any further dip on Supermax shares toward better supports from its 200-day ma (86sen) and 80sen should attract buyers looking for oversold rebound towards the upper Bollinger band (98sen), with tougher hurdles seen at RM1.04 and RM1.10 capping upside. Similarly, Top Glove shares are attractive to bargain on weakness toward support from the 100-day ma (83sen) and 80sen, ahead of rebound upside to recent high of RM1.02, and tougher resistance at RM1.10 and RM1.25.

Asian Markets Rose as Traders Digest China Data

Most Asian markets climbed across the board Thursday as traders assess China’s January inflation data and US Federal Reserve official’s comment. China’s consumer prices fell last month at the fastest pace since the global financial crisis as the world’s second-largest economy struggles to shake off persistent deflation pressures. China’s consumer price index for January fell 0.8% year on year, steeper than the 0.5% drop expected by economists polled by Reuters. Meanwhile, more Fed officials suggested Wednesday they do not see an urgent case for lowering interest rates, adding to a roster of policymakers including Chair Jerome Powell who have warned in recent days that a cut isn’t likely until May at the earliest.

On economics news, the Reserve Bank of India held its repo rate at 6.5% and forecast 7% growth for fiscal year 2024-2025. Japan’s Nikkei 225 ended 2.06% higher at 36,863.28 after a report suggested the country’s central bank would not aggressively tighten its monetary policy, while the Topix closed 0.5% higher at 2,562.63. In Australia, the S&P/ASX 200 extended gains for a third straight day, ending 0.31% higher at 7,639.25. South Korea’s Kospi also rose 0.41% to 2,620.32, while the Shanghai composite index jumped 1.28% to 2,865.50.

Wall Street Inch Higher as Strong Earnings Cheer Traders

Wall Street’s major indexes ticked higher overnight as traders cheered Disney's upbeat earnings report and parsed latest economic data. The Dow Jones Industrial Average rose 0.13% to end at 38,726.33. The S&P edged up 0.06% to finish at 4,997.91, while the Nasdaq Composite added 0.24% to close at 15,793.71. Entertainment giant Disney rose more than 11% as investors welcomed its earnings beat and deals with Taylor Swift and Fortnite maker Epic Games. Shares of chip designer Arm Holdings also jumped more than 55% after the chipmaker reported better than expected fiscal third quarter results and provided upbeat guidance for the current quarter.

On the economic data front, the number of Americans filing new claims for unemployment benefits fell slightly more than expected last week, suggesting underlying labour market strength. Meanwhile, traders have scaled back on bets on a March interest rate cut thanks to a drumbeat of caution from central bank officials. Richmond Federal Reserve President Thomas Barkin joined the chorus of cautious central bankers, saying in a speech that the fight against inflation is not over yet.

Source: TA Research - 9 Feb 2024