TA Sector Research

Daily Brief - 9 Apr 2024

Publish date: Tue, 09 Apr 2024, 11:22 AM

Profit-Taking Interest Set to Increase

Blue chips rose on Monday, copying regional gains as investors weighed when the U.S. Federal Reserve will start cutting rates in the wake of yet another blowout jobs report over the weekend. The FBM KLCI gained 4.73 points to close at 1,559.98, off a high of 1,560.26 and low of 1,554.15, as gainers edged losers 531 to 511 on total turnover of 3.96bn shares worth RM2.33bn.

Resistance at 1,580/1,600; Support at 1,536, 1500

In spite of the firm local benchmark, the sustained negative market breadth and relative weakness on lower liners indicate persistent selling or profit-taking interest, which should increase on further gains. Overhead resistance for the index is revised upwards to 1,580, followed by 1,600, with stronger upside hurdles at the 1,618 level. Immediate support remains at 1,536 and 1,500, the respective rising 50-day and 100-day moving averages, with better support seen at 1,480.

Bargain Gadang & WCT Holdings

Gadang will need breakout confirmation above the upper Bollinger band (45sen) to boost upside momentum towards the 123.6%FP (47sen), with next major resistance from the 138.2%FP (50sen), and immediate supports at 61.8%FR (37sen) and 50%FR (35sen). WCT Holdings needs decisive breakout above the upper Bollinger band (57sen) to enhance upside potential towards the 76.4%FR (61sen), with stronger upside hurdle coming at the peak of 15/10/21 (69sen) going forward. Crucial chart supports at 38.2%FR (47sen)) and 23.6%FR (42sen) limits downside risk.

Most Asian Markets Advance as Traders Digest U.S. Job Data

Asian markets were mostly up on Monday, as traders reacted to US data showing much stronger than expected job growth in March that pointed to a robust economy. The U.S. market did end last week on a positive note, however, after a stronger-than-expected jobs report Friday. The surprising gain in payrolls gave investors hope that a strong economy could continue to support corporate earnings growth, even if it means higher interest rates for longer. For further clarity on how successful the Federal Reserve’s fight against inflation has been, investors are eagerly waiting for readings for March consumer and producer price indexes later this week.

Meanwhile, the Bank of Korea, the Reserve Bank of New Zealand, the Bank of Thailand and the central bank of the Philippines have their monetary policy meetings scheduled this week. Japan’s Nikkei 225 rose 0.91% to 39,347.04, while the broad-based Topix added 0.95% to 2,728.32. In South Korea, the Kospi rose 0.13% to 2,717.65, and the Australia’s the S&P/ASX 200 gained 0.20% to 7,789.10. In Hong Kong, the Hang Seng index inched up by 0.05% to 16,732.85, but the Shanghai composite index fell 0.72 to 3,047.45.

Wall Street Subdued Ahead of Inflation Data

Wall Street’s main indexes finished nearly unchanged overnight as traders kicked off a big week that will see a fresh inflation data test for rate-cut views and the start of first quarter earnings season. The Dow Jones Industrial Average inched lower by 0.03% to close at 38,892.80. The S&P 500 ticked down by 0.04% to end at 5,202.39, while the Nasdaq Composite closed marginally higher by 0.03% at 16,253.96. For further clarity on how successful the Federal Reserve’s fight against inflation has been, traders are eagerly waiting for readings for March consumer and producer price indexes later this week. The inflation data could have a significant impact on the outlook for interest rates, as Federal Reserve officials have repeatedly said they need greater confidence inflation is slowing before cutting rates.

Federal Reserve Bank of Chicago President Austan Goolsbee said on Monday the central bank must take into consideration how long it can maintain its restrictive policy without damaging the economy. The first-quarter reporting season officially kicks off on Friday with numbers from major U.S. banks JPMorgan Chase & Co, Citigroup Inc, and Wells Fargo & Co. Analysts expect aggregated S&P 500 earnings growth of 5.0% year-on-year, down from the 7.2% annual estimate at the beginning of the quarter, according to LSEG. Tesla provided a boost, rising 4.9% after CEO Elon Musk said the company would unveil its self-driving Robotaxi on Aug. 8.

Source: TA Research - 9 Apr 2024

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