TA Sector Research

Daily Brief - 19 Jun 2024

Publish date: Wed, 19 Jun 2024, 09:49 AM

Sideways to Lower Pending Positive Leads

Bursa Malaysia shares traded sideways to lower on Tuesday, with profit-taking on the utilities and transport sectors dampening the blue-chip benchmark index. The FBM KLCI ended down 1.19 points at the day’s low of 1,606.13, off an early high of 1,615.09, as losers beat gainers 766 to 480 on total turnover of 5.93bn shares worth RM4.14bn.

Supports at 1,603/1,590; Resistance at 1,632/1,640

The local market should extend trading sideways to lower near-term, pending positive leads to lift stocks from current consolidation. Immediate index supports are at 1,603, the rising 30-day moving average, with 1,590 and 1,561, the respective 50-day and 100-day moving averages, acting as stronger supports. Immediate resistance remains the recent high of 1,632, with 1,640, 1,660 and then 1,680 as tougher upside hurdles.

Bargain AMBank & CIMB

AMBank shares will need convincing breakout above the 20/2/24 high (RM4.45) to boost upside momentum and target the 123.6%FP (RM4.69) and 138.2%FP (RM4.84) ahead, while key chart supports are at the 76.4%FR (RM4.20) and 200-day ma (RM4.05). CIMB need to sustain above the 4/6/24 high (RM7.04) to extend uptrend and aim for the 123.6%FP (RM7.57) and 138.2%FP (RM7.89) going forward, while uptrend support is from the 100-day ma (RM6.57).

Asian Markets Advance Ahead of Fed Clues

Asian markets rose on Tuesday as traders geared up for retail-sales data and a slew of Federal Reserve speakers. Traders are awaiting a key retail sales report and comments from Federal Reserve officials to better gauge the timing and pace of interest rate cuts. A long list of Fed officials takes to the podium at various venues later in the day, including the Boston Fed's Susan Collins and the Richmond Fed's Thomas Barkin. Meanwhile, Philadelphia Fed President Patrick Harker said the central bank would be able to cut rates one time this year should his forecast play out. Central banks in Australia, Norway and Britain are all expected to leave their interest rates unchanged at meetings this week, though the Swiss National Bank could ease given the recent strength of the Swiss franc.

In economic news, the RBA held its benchmark interest rate at 4.35% for its fifth straight meeting, saying that inflation “remains above target and is proving persistent.” The RBA also noted that the economic outlook remained “uncertain,” with recent data signaling that achieving the inflation target was unlikely to be smooth. Australia’s ASX 200 gained 1.01% to 7,778.10 and South Korea’s Kospi rose 0.72% to 2,763.92. In Japan, the Nikkei 225 jumped 1% to 38,482.11, while the broad-based Topix added 0.58% to 2,715.76. The Shanghai Composite Index gained 0.48% to 3,030.25, while Hong Kong’s Hang Seng index ended flat at 17,935.62.

Wall Street Edge Higher as Traders Parse Economic Data

Wall Street’s main indexes edged higher in choppy trade overnight as traders digest mixed economic data and assessed remarks from Fed officials. The Dow Jones Industrial Average rose 0.15% to close at 38,834.86. The S&P 500 added 0.25% to finish the session at 5,487.03, and the Nasdaq Composite finished almost unchanged at 17,862.23. Wall Street waded through mixed economic data that showed US industrial production increased in May, helped by a broad-based pickup in factory output. Separately, retail sales rose 0.1% in May, versus the 0.3% growth forecast by economists polled by Reuters.

Meanwhile, New York Federal Reserve Bank President John Williams said interest rates will come down gradually over time, but declined to say when the U.S. central bank can kick off its monetary policy easing, while Richmond Fed President Thomas Barkin said he needs to parse several more months of data before he can consider supporting a rate cut. Nvidia jumped 3.8% to surpass Microsoft as the most valuable public company, and continue its milestone run after topping a USD3 trillion market cap and topping Apple in value earlier this month.

Source: TA Research - 19 Jun 2024

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