Range Bound Pending Clearer US Fed Guidance

The local market ended lower on Tuesday, falling in line with weaker regional peers, on concerns the US central bank may decide to keep interest rates at current levels for longer given the elevated inflation. The FBM KLCI fell 8.68 points to settle at the day’s low of

1,544.96, off an early high of 1,552.1, but gainers edged losers 510 to 502 on lower turnover of 4.05bn shares worth RM3.08bn.

Supports at 1,535/1,522; Resistance at 1,559/1,580

Stocks should stay range bound pending more solid guidance from the US Federal Reserve for a clear path on interest rate direction amid stubborn inflation. Stronger index supports cushioning downside will be at 1,535, 1,522 and 1,498, the respective rising 30-day, 50-day and 100-day moving averages. Immediate resistance remains at the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level.

Bargain DNEX & Wasco

DNEX shares need breakout confirmation above the 100-day ma (38sen) to spark further recovery towards the 200-day ma (42sen), with next hurdle seen at 46sen, while the pivot low of 18/1/24 (31.5sen) limits downside risk. Wasco will need to climb above the upper Bollinger band (RM1.31) to enhance upside momentum towards the 150%FP (RM1.36) and 161.8%FP (RM1.43) ahead, while uptrend support will be from the rising 100-day ma (RM1.08).

Nikkei-225 End Above 40K After BoJ Rate Hike

Japan’s Nikkei 225 index ended above 40,000 on Tuesday after the country’s central bank raised interest rates for the first time since 2007. The Bank of Japan officially ended its negative interest rate policy, hiking rates for the first time in 17 years to 0% to 0.1% from -0.1%. The bank also abolished its yield curve control policy, marking a historic shift in policy. Japan’s Nikkei 225 whipsawed following the news but ended the day 0.66% higher at 40,003.60. The broader Topix closed 1.06% higher at 2,750.97.

In another monetary policy meeting, the Reserve Bank of Australia held its benchmark rate at 4.35% for the third meeting in a row. The S&P/ASX 200 closed 0.36% up at 7,7703.20 after the decision, extending gains from Monday. South Korea’s Kospi fell 1.10% to close at 2,656.17, while the small-cap Kosdaq inched 0.29% lower to end at 891.91. Hong Kong’s Hang Seng index slid 1.24%, and the mainland Chinese CSI 300 closed 0.72% lower at 3,577.63.

Wall Street Surge as Nvidia in Focus Pending Fed Decision

Wall Street closed higher overnight after shares in hotshot chipmaker Nvidia shook off early losses and investors looked ahead to the Federal Reserve's policy meeting conclusion on Wednesday for clues on interest rate policy. The Dow Jones Industrial Average surged 320.33 points, or 0.83%, to close at 39,110.76. The S&P 500 gained 0.56% to close at 5,178.51 for a fresh record. Meanwhile, the Nasdaq Composite advanced 0.39% to end at 16,166.79. The central bank is expected to keep rates unchanged Wednesday. However, a recent slate of worrying inflation reports has investors concerned that the central bank could signal interest rates will remain higher for longer than expected. Treasury yields dipped broadly, boosting stocks. The rate on the benchmark 10-year Treasury was down more than 4 basis points at 4.295%.

Chip darling Nvidia climbed roughly 1.1% — recovering from an earlier loss — as investors evaluated the news from its first-ever GTC Conference. CEO Jensen Huang unveiled Nvidia’s latest artificial intelligence chip, labeled Blackwell B200, which he says will be priced between USD30,000 and USD40,000 and could be 30 times faster than current chips that power a multitude of AI operations. Super Micro Computer, a primary vendor for building out Nvidia’s AI servers, dropped about 9% on news of a share offering. Shares have ripped 220% higher this year on AI enthusiasm, leading the stock to be added to the S&P 500 on Monday.

Source: TA Research - 20 Mar 2024