Range Bound Pending Clearer Economic Clues

Blue chips traded sideways on Thursday, with more investors sidelined and awaiting stronger cues from major global central bankers on their monetary policy positions. The FBM KLCI eased 1.49 points to end at 1,590.38, off an opening low of 1,579.69 and high of 1,593.24, as losers edged gainers 652 to 444 on lower turnover of 4.32bn shares worth RM3.1bn.

Key Supports at 1,550/1,529; Resistance at 1,600/1,620

Range bound trade should persist ahead of the weekend, as investors refrain from committing fresh positions until clearer clues emerge on the global inflation and economic growth momentum. Immediate index supports are at 1,550 and recent low of 1,529, then 1,520 and 1,500, while immediate resistance will be at 1,600, 1,620 and then 1,638.

Bargain DNEX & Inari

Short-term technical momentum buy signals imply further near-term upside bias for DNEX towards the 100-day ma (42sen), with a breakout to aim for the 23.6%FR (46sen) and 51sen ahead, while downside is cushioned by key chart supports at 34sen/32sen. Likewise, Inari should appreciate towards the 123.6%FP (RM3.60), with tougher resistance at the 138.2%FP (RM3.78) and 150%FP (RM3.92), while key supports at RM3.30 and recent low of RM3.15 limit downside risk.

Asian Markets Wobble as Traders Await Central Bank Moves

Asian markets bounced between gains and losses on Thursday, as traders assessed signals from central banks on the path ahead for interest rates. Global markets have been rocked in the past week as traders prepare for the US and Japanese central banks to move in opposite directions, in turn undermining the yen’s role as a cheap source of funding for financial assets. Separately, Australia's central bank will not hesitate to raise interest rates if needed to control inflation, its top central banker said on Thursday, reinforcing its hawkish messaging as the pace of underlying inflation remained high. In India, the Reserve Bank held rates steady at 6.5% for a ninth straight meeting as was expected by economists.

Weekly U.S. jobless claims data later in the day could prove market moving following soft monthly payrolls figures on Friday that exacerbated fears of a U.S. economic downturn. Meanwhile, oil prices climbed as traders remained on edge over the possibility of a retaliatory strike from Iran on Israel. The Nikkei 225 dipped 0.74% to end at 34,831.15 while the broadbased Topix dropped 1.11% to 2,461.7. Australia’s S&P/ASX 200 was down 0.23% to end the day at 7,682.00 and South Korea’s Kospi fell 0.45% to 2,556.73. The Shanghai Composite closed flat at 2,869.90, while Hong Kong’s Hang Seng index was up 0.08% at 16,891.83.

Wall Street Rally on Jobs Data

Wall Street's main indexes finished sharply higher overnight after weekly initial jobless claims figures came in lower than expected, alleviating some concerns about the state of the labor market. The Dow Jones Industrial Average surged 1.76% to 39,446.49. The S&P 500 advanced 2.3% to 5,319.31, while the Nasdaq Composite jumped 2.87% to 16,660.02. The rally on Wall Street came after the Labor Department released a report showing first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended August 3rd. The data suggested fears the labor market is unraveling were overblown and the gradual softening in the labor market remains intact.

Meanwhile, oil futures registered their third straight day of gains, with growing supply risks in the Middle East offsetting any demand concerns that at the start of the week had pushed prices to their lowest levels since early 2024. Pharmaceutical giant Eli Lilly surged 9.5% after posting better-than-expected earnings and raising its full-year outlook. Chipmakers Nvidia and Broadcom both jumped by more than 6%. Meta Platforms climbed 4.2%, and Apple ticked up about 1.7%.

Source: TA Research - 9 Aug 2024