Domestic Rotational Plays to Highlight

The local market staged cautious rebound on Tuesday, as mild bargain hunting interest lifted stocks in the healthcare, technology and property sectors. The FBM KLCI rose 7.48 points to settle at 1,656.39, off an early low of 1,643.11 and high of 1,657.32, as gainers led losers 672 to 379 on reduced total volume of 2.55bn share worth RM2.41bn.

Key Resistance at 1,675/1,684; Supports at 1,633/1,620

Domestic rotational plays on selective sectors should highlight mild bargain hunting interest in the near-term, with the firm ringgit trend and potential for further interest rate cuts by key global economies to underpin sentiment. Immediate resistance remains the recent high of 1,675, with next high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels. Immediate support is set at the recent correction low of 1,633, with 1,620 and then 1,600 acting as stronger supports.

Bargain Hartalega & Kossan

Hartalega will need convincing strength above the 100-day ma (RM3.06) to fuel further upside towards RM3.30, the 123.6%FP (RM3.43) and 138.2%FP (RM3.68) ahead, while downside risk is capped by the 76.4%FR (RM2.66). Kossan need a confirmed breakout above the 200-day ma (RM2.06) to enhance upside momentum towards the 100-day ma (RM2.19), RM2.33 and 123.6%FP (RM2.42) going forward, while the 61.8%FR (RM1.79) and lower Bollinger band (RM1.71) cushions downside.

Asian Markets Mixed on Powell Remarks

Stocks in Asia trade mixed in holiday-thin trade on Tuesday as traders digest hawkish comments from Federal Reserve Chair Jerome Powell and economic data from the region. U.S Fed Chair Jerome Powell, who suggested the central bank will continue to lower interest rates but stressed the downward path for rates is not on a preset course. Powell's remarks partly offset optimism the Fed will continue to lower interest rates aggressively in the coming months. On economic news, business optimism among large Japanese manufacturers came in at +13, unchanged from the quarter before and in line with forecasts from a Reuters poll. In Australia, retail sales rose more than expected in August as tax cuts and warmer weather encouraged households to spend more.

Meanwhile, markets were also bracing for any impact from news that Israel had begun “targeted ground raids” in Lebanon. Japan’s Nikkei 225 gained 1.93% to close at 38,651.97, while the Topix added 1.69% and closed at 2,690.78. Australia’s S&P/ASX 200 slipped 0.74% to end at 8,208.90, retreating from an all-time high. South Korea and Hong Kong markets are closed for a public holiday. Mainland China will be closed for the rest of the week, due to the Golden Week holiday.

Wall Street Slides on Middle East Tensions

Wall Street’s main indexes ended lower overnight as traders grew more cautious after Iran fired missiles at Israel. The Dow Jones Industrial Average fell 0.41% to 42,156.97. The S&P 500 pulled back 0.93% to 5,708.75, while the Nasdaq Composite lost 1.53% to finish at 17,910.36. The weakness on Wall Street came amid escalating tensions in the Middle East after Iran launched a ballistic missile attack against Israel. Iran launched the salvo of ballistic missiles in retaliation for Israel's campaign against Tehran's Hezbollah allies. In response, U.S. President Joe Biden directed the U.S. military to aid Israel's defense and shoot down missiles aimed at Israel, according to the White House National Security Council.

The news from the Middle East largely overshadowed separate report showing a continued contraction by U.S. manufacturing activity in September and an unexpected increase by U.S. job openings in August. Traders were also cautious ahead of U.S. jobless claims data on Thursday and monthly payrolls on Friday. Tesla, Nvidia and Apple all ended the day lower. But Facebook parent Meta Platforms bucked this trend, posting an all-time intraday high.

Source: TA Research - 2 Oct 2024