Sideways Pending Clearer Recovery Cues

Bursa Malaysia shares rose on Monday, with utility, construction and telco heavyweights leading gains on lessening worries over the global economy and investor focus on domestic investment themes. The FBM KLCI was up 10.61 points to close at 1,606.66, off an opening high of 1,598.53 and low of 1,609.57, as gainers led losers 646 to 406 on total turnover of 4.01bn shares worth RM2.92bn.

Immediate Supports at 1,580/1,550; Resistance at 1,620/1,628

Stocks should be in a holding pattern following the strong recovery from last Monday’s selloff, as investors look to take profits or reduce exposure and await more solid signs of sustained recovery momentum on the global front. Immediate index supports are revised to 1,580, then 1,550 and recent low of 1,529, with 1,520 and 1,500 as stronger supports, while immediate resistance will be at 1,620, 1,628 and then 1,638.

Bargain Axiata & CelcomDigi

Following the recent strong rebound, Axiata will still need to overcome the 38.2%FR (RM2.50) to aim for the 50%FR (RM2.60) and 61.8%FR (RM2.70) ahead, with downside risk capped by the 31/10/23 pivot low (RM2.12). Likewise, CelcomDigi will need to convincingly break above the 61.8%FR (RM3.88) to target the 76.4%FR (RM4.08) and 30/5/23 high (RM4.42) going forward, while downside is cushioned by the 23.6%FR (RM3.34).

Asian Markets Mixed Ahead of Key Economic Data

Asian markets ended mixed on Monday as traders shifted focus to key US data prints and economic data from the region for an update on global growth prospects. Key for the Federal Reserve will be U.S. consumer prices on Wednesday where economists look for rises of 0.2% in both the headline and core, with the annual core slowing a tick to 3.2%. As well as July retail sales, there is data on industrial output and housing starts, along with several surveys on regional manufacturing and consumer sentiment. Elsewhere in Asia, traders will be focused on China’s retail sales and industrial production data this week to gauge whether the nation’s economy is finding traction.

Meanwhile, New Zealand’s central bank will also decide on policy this week, with the economy showing signs of entering its third recession in less than two years. On economic news, India’s industrial output for June is expected to come in at 5.5%, slightly down from 5.9% in May. Australia’s S&P/ASX 200 gained 0.46% to end at 7,813.70 and South Korea’s Kospi added 1.15% to 2,618.30. The Shanghai Composite fell 0.14% to 2,858.05, while Hong Kong’s Hang Seng index was up 0.13% to 17,111.65. Japanese markets were closed for a holiday.

Wall Street Mixed as Traders Await Economic Data

Wall Street's main indexes finished mixed overnight as traders braced for a week full of key economic data signals. The Dow Jones Industrial Average fell 0.36% to 39,357.01. The S&P 500 closed nearly unchanged at 5,344.39 and the Nasdaq Composite gained 0.21% to close at 16,780.61. The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of several key U.S. economic reports later this week. Traders are awaiting Wednesday's U.S. consumer price index reading and retailer earnings to assess demand by shoppers. The Federal Reserve is widely expected to cut interest rates next month, with CME Group's Fed Watch Tool currently indicating a split regarding the probability of a quarter or half point rate cut.

Meanwhile, U.S. crude oil rallied to top USD80 per barrel as the Pentagon dispatched more forces to the Middle East in anticipation of an Iranian attack on Israel. Defense Secretary Lloyd Austin ordered a carrier strike group, including F-35 warplanes, to accelerate its deployment to the region. Austin also ordered a guided-missile submarine to the Middle East. Shares of Nvidia gained 4% to help the technology-heavy index climb. Walmart and Home Depot are due to report earnings later this week.

Source: TA Research - 13 Aug 2024