Range Bound on Persisting Global Inflation Concerns

Bursa Malaysia shares closed mixed on Monday, with most investors sidelined while awaiting more leads from key global central bank meetings on inflation and interest rate trends. The FBM KLCI ended up 1.25 points at 1,539.27, after moving within early high of 1,574.1 and low of 1,537.03, as losers edged gainers 536 to 426 on total turnover of 3.33bn shares worth RM2.56bn.

Supports at 1,525/1,510; Resistance at 1,559/1,580

Stocks should extend range bound trade on prevailing caution over the US and European central banks’ signalling on inflation upside risks and interest rate guidance. Stronger index supports cushioning downside on further profit-taking pullbacks will be at 1,525, 1,510 and 1,487, the respective 30-day, 50-day and 100-day moving averages. Immediate resistance will be from the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level.

Bargain Gamuda & Maybank

Gamuda need breakout confirmation above the 138.2%FP (RM5.32) to extend higher towards the 150%FP (RM5.50) and 161.8%FP (RM5.70) ahead, while downside should be capped by the 50-day ma (RM4.92) and 100-day ma (RM4.72). Maybank will need decisive breakout above the 138.2%FP (RM9.62) to enhance upside momentum and aim for the 150%FP (RM9.76) and 161.8%FP (RM9.90) going forward, with uptrend support from the rising 30-day ma (RM9.34) and 50-day ma (RM9.20) cushioning downside.

Asian Markets Mixed Ahead of Key Central Bank Meetings

Asian markets finished mixed in choppy trade on Monday as traders remained cautious ahead of key central bank meeting and economic data this week. All eyes will be on Federal Reserve Chair Jerome Powell when he testifies before lawmakers on Wednesday and Thursday, though analysts assume he will stay in wait-and-see mode on policy given recent upside surprises on inflation. The February payrolls report on Friday could also shift the calculus with forecasts favouring a still-solid rise of 200,000 after January's barnstorming 353,000 jump. The European Central Bank also meets Thursday and is considered certain to keep rates at 4.0%, but also lower its outlook for inflation in a nod to eventual cuts.

In economic news, the total number of building approvals issued in Australia in January was down a seasonally adjusted 1% on month - coming in at 12,850. That missed forecasts for an increase of 4% following the 9.5% drop in December. Japan’s Nikkei 225 rose 0.50% to 40,109.23, while the broader Topix fell 0.12% to 2,706.28. South Korea’s Kospi jumped 1.21% to 2,674.27, while the small cap Kosdaq added 1.16% to 872.97. Australia’s S&P/ASX 200 ended 0.13% lower at 7,735.80, and the Shanghai composite rose 0.41% to 3,039.31.

Wall Street Slips Ahead of Powell Testimony

Wall Street's main indexes finished in negative territory overnight as traders girded for a week where Federal Reserve Chair Jerome Powell's testimony and the monthly jobs report could put equity gains to the test. The Dow Jones Industrial Average fell 0.25% to 38,989.83. The S&P lost 0.12% to 5,130.95, while the Nasdaq Composite fell 0.41% to 16,207.51. Market participants appeared to be treading water ahead of Powell's two-day congressional testimony on Wednesday and Thursday, the European Central Bank's policy decision and the Labor Department's crucial February jobs report to be released early on Friday. Powell's testimony and the jobs data will be scrutinized for any clarification on the timing and extent of the Fed's expected cuts to its key policy interest rate this year.

Tech laggards also held the market back. Apple fell nearly 3% after getting hit with a European Union antitrust fine of nearly USD2 billion. Tesla dropped almost 7% after announcing more price discounts and incentives late last week. However, losses were mitigated by gains of more than 3% in AI darling Nvidia. Super Micro Computer also soared 18% after S&P Dow Jones Indices announced it would join the S&P 500 later this month. Outside of technology, Macy’s soared more than 13% after Arkhouse Management and Brigade Capital Management increased their offer for the department store.

Source: TA Research - 5 Mar 2024