Sideways Ahead of Budget 2025

Bursa Malaysia shares ended softer on range bound trade Monday, with mild bargain hunting interest on key telco, property and banking stocks cushioning profit-taking activities, while key regional markets rose as investors await further details of the support measures from China. The FBM KLCI gained 2.99 points to settle at 1,636.54, off an early high of 1,642.56 and low of 1,632.37, as losers edged gainers 654 to 341 on total turnover of 2.24bn shares worth RM2.09bn.

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

The local market should extend sideways trade as investors cautiously await the tabling of Budget 2025 for clues on the economic direction and the corresponding impact on corporates. Immediate index support will be the recent correction low of 1,625, with 1,620 and then 1,600 acting as stronger supports. Immediate resistance is set 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.

Buy Ekovest & IWCity

Ekovest shares are poised for recovery, with a confirmed breakout above the 100-day ma (42sen) to enhance upside momentum towards the 50%FR (47sen) and 61.8%FR (51sen) ahead, while crucial supports cushioning downside is capped at the 18/9/24 low (34sen) and the pivot low of 11/9/24 low (32sen). IWCity shares need breakout confirmation above the

100-day ma (66sen) to boost upside momentum and target the 38.2%FR (69sen) and 50%FR (76sen) going forward, while crucial support from the lower Bollinger band (52sen) and 25/8/23 low (49sen) limits downside risk.

Asian Markets Rose as Traders Assess China Stimulus Measures

Asian markets advance on Monday, as traders assessed China’s weekend press briefing and awaited a slew of economic data this week from the region. Chinese stocks have been on a tear since the government late last month announced its most aggressive stimulus since the pandemic, though some of that rally has since lost momentum as traders await further details of the support measures. Focus is turning to China’s next major policy briefing in the coming weeks from the Communist Party-controlled parliament that oversees the budget for details of more stimulus.

This week, Thailand, Philippines and Indonesia central banks will give policy decisions ahead of the European Central Bank later this week. The Shanghai Composite Index jumped 2.07% to 3,284.32, but Hong Kong’s Hang Seng fell 0.75% to 21,092.97. South Korea’s blue chip Kospi gained around 1% to finish at 2,623.29 and the small-cap Kosdaq index ended nearly flat at 770.26. Australia’s S&P/ASX 200 also gained 0.47% to end at 8,252.80, while Japan’s market was closed for a holiday

Wall Street Closes Higher on Earnings Optimism

Wall Street’s three main stock indexes ended higher overnight as traders looked ahead to Corporate America for further vindication of soft-landing bets. The Dow Jones Industrial Average gained 0.47% to end at 43,065.22. The S&P 500 added 0.77% to close at 5,859.85, while the Nasdaq Composite gained 0.87% to settle at 18,502.69. All eyes will be on earnings the rest of the week, and traders are betting on fireworks in the stock market after the results. Last Friday, strong earnings from JPMorgan and Wells Fargo helped send the S&P 500 and Dow industrials to new highs. High-profile earnings on tap for the rest of the week include Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Netflix, along with a host of healthcare and industrial names.

Overall trading activity was somewhat subdued, however, with some traders likely away from their desks due to the Columbus Day holiday. A lack of major U.S. economic data may also have kept some traders on the sidelines ahead of the release of key reports on retail sales and industrial production later in the week. Tech stocks led the day's gains, with chip giant Nvidia rising nearly 3% to close at a new high above USD138 per share. Other semiconductor stocks also surged including chip equipment maker ASML, Arm Holdings, and Applied Materials.

Source: TA Research - 15 Oct 2024