Consolidate on Lacking Local Catalysts

Bursa Malaysia shares ended softer on range bound trade Wednesday, with most investors sidelined and cautious ahead of the U.S Federal Reserve's latest meeting minutes for additional clues on the Fed's interest rate trajectory. The FBM KLCI ended 0.71 points down to settle at the day’s low of 1,634.91, off a high of 1,642.29, as losers narrowly edged gainers 566 to 548 on total turnover of 3.22bn shares worth RM2.47bn.

Support at 1,625/1,620; Resistance at 1,660/1675

The local market should continue to consolidate given the weak buying momentum and lack of domestic positive catalysts, while investors await key U.S inflation data and big banks earnings. Immediate index support stays at the low of 1,625, with 1,620 and then 1,600 acting as stronger supports. Immediate resistance remains at 1,660, followed by the recent highs of 1,675 and 1,684, and then 1,695, the Dec 2020 high, as tougher resistance levels.

Bargain Tenaga & TM

Tenaga needs breakout confirmation above the above the upper Bollinger band (RM15.15) to enhance upside potential towards the 123.6%FP (RM15.76) and 138.2%FP (RM16.62) ahead, while key chart support cushioning downside is capped at 76.4%FR (RM12.98). Likewise, TM will need convincing breakout above the upper Bollinger band (RM6.79) to target the

123.6%FP (RM7.66) and 138.2%FP (RM8.03) ahead, while crucial support from the 61.8%FR (RM6.06) limits downside risks.

Asian Markets Mixed Ahead of U.S. Data

Asian markets were mixed Wednesday, as traders turned cautious ahead of the release of key U.S inflation data and the Fed's latest meeting minutes later in the week. Traders will get minutes of the Fed's September meeting, which will show discussions about what at the time appeared to be a deteriorating labour market that ended with all but one policymaker agreeing to a 50-basis point cut. However, bets for another jumbo cut in November have been taken off the table after the latest nonfarm payroll data indicated a more resilient picture. However, Chinese shares slumped as lack of concrete measures in China disappointed markets, given the numerous headwinds, from a prolonged housing crisis to sluggish consumption and local government debt.

On economic news, New Zealand's central bank slashed the cash rate by 50 basis points to 4.75% on Wednesday and left the door open for more easing as policymakers said monetary conditions are still restrictive even though inflation has returned to the target. Japan’s Nikkei 225 gained 0.87% to 39,277.96 and the Topix added 0.30% to 2,707.24. The Shanghai Composite Index slumped 6.62% to 3,258.86, while Hong Kong’s Hang Seng slipped 1.38% to 20,637.24. Australia’s S&P/ASX 200 rose 0.13% and closed at 8,187.40 and South Korea’s markets are closed for a public holiday.

Wall Street Rises as Traders Digest Fed Minutes

Wall Street’s three main stock indexes ended higher overnight as traders digested Federal Reserve meeting minutes ahead of September inflation data and earnings reports. The Dow Jones Industrial Average gained 1.03% to settle at 42,512.00. The S&P 500 rose 0.71% to end at 5,792.04, while the Nasdaq Composite added 0.60% to finish at 18,291.62. Federal Reserve officials were divided at their meeting last month over how much to reduce interest rates, with a substantial majority favoring the larger half-percentage-point reduction that was ultimately approved, but others favoring a smaller quarter-point cut.

The market is awaiting the Consumer Price Index inflation report due on late Thursday and the third-quarter corporate earnings season, which kicks off in earnest with some of the biggest U.S. banks reporting on Friday. Technology stocks were notable leaders in the rally, with Amazon and Apple gaining more than 1%. Super Micro Computer rallied 4%. Alphabet shares are down more than 2%, after the U.S. Department of Justice said it may ask a judge to force Google to divest parts of its business.

Source: TA Research - 10 Oct 2024