Sideways Pending Catalyst to Spark Rebound

Blue chips extended profit-taking correction for a third straight session Thursday, led by construction, property and consumer heavyweights. The FBM KLCI fell 7.1 points to close at 1,592.69, off an opening high of 1,596.27 and low of 1,590.37, as losers trashed gainers 816 to 352 on slower trade totalling 5.04bn shares worth RM3.42bn.

Supports at 1,591/1,563; Resistance at 1,632/1,640

The local market should sustain sideways trading ahead of the weekend, pending fresh domestic catalysts to spark rebound from the current profit-taking spell. Immediate index supports are retained at 1,591 and 1,563, the respective 50-day and 100-day moving averages, while immediate resistance remains the recent high of 1,632, with 1,640, 1,660 and then 1,680 as tougher upside hurdles.

Bargain Maybank & Public Bank

Maybank will be attractive to bargain on further weakness, while a convincing breach above the upper Bollinger band (RM10.04) should aim for the 123.6%FP (RM10.26) and 138.2%FP (RM10.50) ahead, with the 100-day ma (RM9.66) providing uptrend support. Further fall on Public Bank to key retracement support at the 23.6%FR (RM3.95) should attract bargain hunters ahead of rebound upside towards the 50%FR (RM4.15), with next hurdles at the 61.8%FR (RM4.24) and 76.4%FR (RM4.35).

Asian Markets Mostly Lower as China Kept Rates Steady

Asian markets were mostly lower on Thursday as China kept its one- and five-year loan prime rates unchanged. The one-year loan prime rate serves as a benchmark for most corporate and household loans, while the five-year rate serves as a peg for property mortgages. The one-year LPR currently stands at 3.45%, while the five-year LPR is at 3.95%. Earlier this week, the People’s Bank of China kept the 1-year medium-term lending facility rate steady at 2.5%.

Mainland China’s CSI 300 dipped 0.72% to close at 3,503.28, while Hong Kong’s Hang Seng index fell by 0.52%. Top losers in Hong Kong include hot pot chain Haidilao which dropped 6.74%, as well as Shenzhou International Group and Budweiser Brewing Company APAC, down 3.42% and 3.95%, respectively. South Korea’s Kospi added 0.37% to close at 2,807.63, while Japan’s Nikkei 225 rose 0.16%, ending the day at 38,633.02. Australia’s S&P/ASX 200 was flat.

S&P 500 and Nasdaq Fell as Nvidia Tumbles

S&P 500 and Nasdaq ended lower overnight as AI darling Nvidia dropped sharply, while traders evaluated new batch of economic data and commentary from Federal Reserve officials to determine the timing of interest-rate cuts this year. The Dow Jones Industrial Average jumped 0.77% to close at 39,134.76. The S&P 500 fell 0.25% to end at 5,473.17, while the Nasdaq Composite dropped 0.79% to finish at 17,721.59. Shares of Nvidia erased earlier session gains as the stock, along with other technology-related names, weighed on the Nasdaq. Meanwhile, the advance by the Dow came amid a 4.3% spike by shares of Salesforce along with strong gains by Chevron and IBM Corp.

Traders were also digesting the latest batch of U.S. economic data, including a Labor Department report showing a modest pullback in first-time claims for U.S. unemployment benefits in the week ended June 15th. Another set of data showed U.S. single-family homebuilding fell in May amid continued high mortgage rates. Meanwhile, Minneapolis Fed President Neel Kashkari said it would take a year or two to get inflation back to 2%, as wage growth might still be too high, spurring worries of interest rates staying elevated for longer.

Source: TA Research - 21 Jun 2024