Range Bound as Market Awaits Key Regional Data

While blue chips stayed in profit-taking consolidation on Monday, bargain hunting in construction, technology and property stocks lifted the broader market higher. The FBM KLCI ended down 0.61 point at 1,678.19, off an early high of 1,683.43 and low of 1,671.9, but gainers led losers 679 to 467 on total turnover of 3.25bn shares worth RM3.02bn.

Supports at 1,633/1,620; Key Resistance at 1,684/1,695

Blue chips are likely to extend range bound trade after the recent volatility, while investors assess key economic data from regional and North Asian countries for further market leads. Immediate index support remains at the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports. Key resistance will be the recent high of 1,684, then 1,695, the Dec 2020 high, followed by the 123.6%FP (1,702) and 138.2%FP (1,741) of the 1,369 low to the 1,638 high.

Bargain Ekovest & IWCity

Ekovest will need to sustain climb above the 23.6%FR (42sen) to strengthen recovery before meeting overhead resistance from the 100-day ma (45sen) and 200-day ma (47sen) ahead, with downside risk capped by the June 2023 low (35sen). IWCity need convincing breakout above the 23.6%FR (61sen) to fuel recovery momentum towards the 38.2%FR (69sen) and 200-day ma (73sen) going forward, while the Aug 2023 low (48sen) provide strong chart support.

Asian Stocks Mixed After China PMI Slump to 6-Month Low

Asian markets were mixed on Monday, with some major markets reversing losses as investors assessed China’s business activity numbers released over the weekend, while awaiting a slew of data due later this week. China released its official purchasing managers’ index data for August. The manufacturing PMI fell to a six-month low of 49.1, a faster contraction compared to the 49.4 seen in July. On the other hand, China’s non-manufacturing PMI climbed to 50.3, up from July’s 50.2. Among the economic data coming out from major markets in the region are inflation numbers from South Korea, Australia’s second-quarter GDP data, as well as data on pay and household spending from Japan later this week.

Hong Kong Hang Seng index fell 1.65%, while the CSI300 shed 1.70% to 3,265.01, hitting its lowest level in seven months. Japan’s Nikkei 225 gained 0.14% to close at 38,700.87, while the broad based Topix was 0.12% higher at 2,715.99. South Korea’s Kospi was 0.25% up at 2,681, while the small cap Kosdaq gained 0.2% and ended at 769.21. Australia’s S&P/ASX 200 reversed losses and rose 0.22% to 8,109.9. At this level, the index is less than 5 points from its all-time closing high of 8,114.7.

European Markets Mixed as Traders Digest Economic Data

Major European markets finished on a mixed note overnight, as traders digest economic data from the region and braced for a data-packed week culminating in a U.S. jobs report that could decide whether a rate cut expected this month will be regular or super-sized. The pan European Stoxx 600 edged down 0.02%. The U.K.'s FTSE 100 ended down 0.15%, while Germany's DAX and France's CAC 40 gained 0.13% and 0.20%, respectively. U.S. markets were closed for the Labor Day public holiday. Data showing continued contraction in eurozone manufacturing activity weighed on sentiment. The HCOB final manufacturing Purchasing Managers' Index posted 45.8 in August, unchanged from June and July, final data from S&P Global showed.

Elsewhere, the U.K. manufacturing PMI increased to a 26-month high of 52.5 in August, which is in expansion territory, according to the report by S&P Global. Wins for the populist parties in German state elections added a fresh layer of political uncertainty in European markets. The big event of the week will be the U.S. non-farm payrolls report on Friday, which is expected to show the economy added 165,000 jobs in August, up from 114,000 in July.

Source: TA Research - 3 Sept 2024