TA Sector Research

Daily Brief - 1 Mar 2024

Publish date: Fri, 01 Mar 2024, 11:38 AM

Range Bound as Investors Await Key US Inflation Data

Stocks closed mixed on Thursday as investors digested the final batch of the current corporate earnings season and await the keenly anticipated US PCE price index for inflation leads. The FBM KLCI gained 5.85 points to close at 1,551.44, after moving between early low of 1,544.67 and high of 1,554.79, but losers beat gainers 679 to 370 on active trade totalling 5.34bn shares worth RM7.01bn.

Supports at 1,545/1,524; Resistance at 1,580/1,600

The local market should stay range bound ahead of the weekend, with investors closely monitoring key inflation data from the US for stronger cues on the inflation and interest rate trend. Key index supports cushioning downside on profit-taking pullbacks will be at 1,545,1,524 and 1,508, the respective rising 10-day, 30-day and 50-day moving averages. Immediate resistance remains at 1,580, with stronger upside hurdles coming at 1,600 and 1,620.

Bargain MRCB & UEM Sunrise

MRCB will be attractive to bargain on further weakness for rebound upside towards the 150%FP (62sen), with tougher hurdles seen at the 161.8%FP (65sen) and 176.4%FP (69sen), with support from the 50-day ma (54sen) and 51sen cushioning downside. UEM Sunrise need sustained strength above the 123.6%FP (RM1.11) to fuel further upside momentum and target the 138.2%FP (RM1.21) and 150%FP (RM1.30) ahead, while support at 94sen and the 100-day ma (87sen) should cap downside risk.

Asia Mixed as Investors Await Key US Inflation Data

Asian stocks ended mixed Thursday as investors awaited U.S. inflation data for clues on the Federal Reserve’s interest rate path. The U.S. personal consumption expenditures price index — the Fed’s preferred inflation gauge — is due later in the day. Hong Kong’s Hang Seng index eased 0.15%, while China’s CSI 300 closed 1.9% higher at 3,516.08 a day before its manufacturing purchasing managers’ index reading. Hong Kong on Wednesday said it would do away with property curbs in an effort to buoy its real estate sector and forecast economic growth in a range of 2.5% to 3.5% for 2024.

Separately, Walt Disney and Indian conglomerate Reliance will merge their Indian businesses. The combined entity was valued at roughly USD8.5 billion on a post-money basis, excluding synergies. Japan’s Nikkei 225 closed 0.1% lower at 39,166.19, while the Topix was flat at 2,675.73. The Nikkei 225 had hit a record high earlier in the week. South Korea’s Kospi was down 0.4%, while in Australia, the S&P/ASX 200 rose 0.5% to close at 7,698.70.

Wall Street Ends Higher as Traders Digest Economic Data

Wall Street's main indexes finished in positive territory overnight as traders digested a key inflation metric that met economist expectations along with fresh U.S. housing numbers. The Dow Jones Industrial Average inched up 0.12% to 38,996.39. The S&P rose 0.52% to 5,096.27, while the Nasdaq Composite gained 0.90% to 16,091.92. The strength on Wall Street came following the release of a highly anticipated Commerce Department report showing consumer prices in the U.S. increased in line with economist estimates in the month of January. Data showed the Federal Reserve’s preferred measure of inflation was stubbornly above the central bank’s target in January, but at least didn’t exceed Wall Street forecasts. There were also signs that consumer spending remains robust. Meanwhile, pending home sales posted a surprise drop in January amid swings in mortgage rates.

Fed Bank of San Francisco President Mary Daly said central bank officials are ready to lower interest rates as needed but emphasized there’s no urgent need to cut given the strength of the economy. Her Atlanta counterpart Raphael Bostic reiterated his view that it will probably be appropriate to begin easing policy this summer based on his outlook for inflation. Heavyweight chipmaker Nvidia advanced as the biggest boost to the benchmark S&P index and Nasdaq while smaller rival Advanced Micro Devices, surged. Those and other technology companies have been the centerpiece of a Wall Street rally in recent months, fueled by optimism over growth prospects related to artificial intelligence.

Source: TA Research - 1 Mar 2024

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