Construction & Property Stocks on Play

Profit-taking in plantation, telco and consumer heavyweights dragged the local blue-chip index lower Wednesday, with most market players sidelined ahead of a local religious and Good Friday market holidays. The FBM KLCI shed 7.82 points to close at 1,530.60, off an opening high of 1,536.58 and low of 1,528.52, as losers beat gainers 645 to 422 on moderate turnover of 3.75bn shares worth RM3.1bn.

Supports at 1,525/1,503; Resistance at 1,599/1,580

Blue chips should trade sideways ahead of the weekend, as investors keenly anticipate release of the key US PCE price index for inflation leads, while rotational play on construction and property stocks pick up steam. Stronger index supports cushioning downside will be at 1,525 and 1,503, the respective rising 50-day and 100-day moving averages, with better support seen at 1,480. 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 Ekovest & IWCity

Ekovest will need convincing breakout above the 61.8%FR (52sen) to extend upswing towards the 76.4%FR (56sen), with next key resistance seen at the 8/1/24 peak (62sen), and key retracement support at the 38.2%FR (45sen) cushioning downside risk. Meanwhile, IWCity need to decisively climb above the 76.4%FR (91sen) to reinforce uptrend momentum and aim for the 8/1/24 peak (RM1.03) and 123.6%FP (RM1.15) going forward, while key uptrend support from the 100-day ma (73sen) limits downside risk.

Asian Markets Mixed Ahead Of U.S. Inflation Data

Asian market ended mostly mixed Thursday, as traders cautiously awaited key US inflation data and Fed Chair Jerome Powell's speech while the markets are closed on Good Friday. Markets were largely rangebound ahead of Friday's much-anticipated U.S. core personal consumption expenditures price index data, the Federal Reserve's preferred measure of inflation. Few markets will be open to digest the new reading, however, given the long Easter weekend in many countries. Meanwhile, the yen languished near its weakest in decades on Thursday though the threat of intervention from Japanese authorities kept investors leery of pushing the currency to a new low.

On economic news, Australian retail sales rose 0.3% month-on-month in February, according to data from the Australian Bureau of Statistics. The reading fell short of expectations in a Reuters poll for a 0.4% rise. In January, Australian retail sales were up 1.1%. Japan’s Nikkei 225 fell 1.46% to 40,168.07, while the broader Topix shed 1.73% to close at 2,750.81. South Korea’s Kospi ended 0.34% lower at 2,745.82. The smaller cap Kosdaq dipped 0.13% to 910.05. In Australia, the S&P/ASX 200 ended 0.99% higher at 7,896.90, and the Shanghai composite index gained 0.59% to 3,010.66.

The Dow & S&P 500 Rise Slightly Ahead of Inflation Reading

The Dow Jones Industrial Average and the S&P 500 closed out the week with modest gains overnight as traders digested the latest batch of economic data while looking towards the next inflation reading. The Dow Jones Industrial Average rose 0.12% to settle at 39,807.37. The S&P added 0.11% to end at 5,254.35, while the Nasdaq Composite lost 0.12% to 16,379.46. A final reading on fourth-quarter GDP released overnight showed the U.S. economy grew faster than previously estimated in the fourth quarter, partly due to strong consumer spending, while a separate report showed initial jobless claims indicated the labor market remains on solid footing. While U.S. equity markets will be closed for the Good Friday holiday, the focus will be on the release of the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, for clues on the timing and size of rate cuts this year from the central bank.

While communication services, energy and tech were the best performing of the 11 major sectors this quarter, only real estate suffered a decline. Walgreens Boots shares rose after its quarterly earnings in which it recorded an impairment charge on its investment in clinic operator VillageMD. Home Depot slipped after the home improvement retailer said it would buy building materials supplier SRS Distribution in an USD18.25 billion deal in its largest acquisition. Tesla shares are down around 29% in the first quarter, making the electric vehicle maker the S&P 500′s worst-performing stock quarter to date.

Source: TA Research - 29 Mar 2024