Sideways as Consolidation Persists

Bursa Malaysia shares stayed in consolidation mode on Monday, as the lack of market boosting measures in Budget 2025 kept investors sidelined. The FBM KLCI ended flat at 1,645.68 (- 0.31) after moving between an early low of 1,642.52 and high of 1,648.05, as losers beat gainers 645 to 395 on total turnover of 3.02bn shares worth RM2.19bn.

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

Stocks should extend sideways trade as investors search for more catalysts to lift the market from current consolidation. Immediate index 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. Immediate support will be the recent correction low of 1,625, with 1,620 and then 1,600 acting as stronger supports.

Bargain Velesto & Wasco

Velesto is in base building mode, with key chart supports at the lower Bollinger band (19sen) and 38.2%FR (16sen) cushioning downside, while a breakout above the 61.8%FR (22sen) should target the 76.4%FR (25sen) and 29sen ahead. Wasco remains in consolidation to reinforce support above the lower Bollinger band (RM1.06), while a decisive breakout above the 61.8%FR (RM1.19) should aim for the 76.4%FR (RM1.35) and RM1.45 going forward.

Asian Markets Wobble as Traders Await China Stimulus Clarity

Stocks in Asia were mixed on Monday as traders awaited more detailed information on Beijing's stimulus plans and assessed economic data from the region. Optimism over Beijing's slew of stimulus measures, first announced late in September, has turned into caution in recent days as traders look to further details of more fiscal support from policymakers. China cut benchmark lending rates as anticipated at the monthly fixing on Monday, following reductions to other policy rates last month as part of a package of stimulus measures to revive the economy. On economic news, South Korea's exports for the first 20 days of October fell 2.9% from a year earlier, customs agency data showed on Monday.

Other key economic data this week will include October inflation figures for Japan’s capital city of Tokyo, as well as advance third-quarter GDP figures from South Korea. Meanwhile, finance ministers and central bank chiefs from around the world gather in Washington this week for the annual meeting of the International Monetary Fund and World Bank. Japan’s Nikkei 225 inched down by 0.07% to close at 38,954.80 and the broad-based Topix slipped 0.34% to finish at 2,679.91. South Korea’s Kospi gained 0.56% to 2,608.29 and Australia’s S&P/ASX added 0.74% to 8,344.40. The Shanghai Composite Index inched higher by 0.20% to 3,268.11, while Hong Kong’s Hang Seng Index dropped 1.58% to 20,475.45.

Wall Street Mixed as Trader Eye Earnings, Economic Data

Wall Street's major stock indexes ended mixed overnight as traders looked ahead to the release of a slew of corporate earnings news from big-name companies. The Dow Jones Industrial Average lost 0.80% to close at 42,931.60. The S&P 500 slipped 0.18% to 5,853.98, while the Nasdaq Composite gained 0.27% to 18,540.01. Wall Street faces big earnings hurdle this week, with roughly 20% of the S&P 500 companies scheduled to report. Thus far, the results have been mixed. Of the roughly 14% of S&P 500 companies that have already posted third-quarter results, 75% have beaten expectations, according to FactSet. Analysts have significantly downgraded their earnings expectations for the quarter in recent months.

Reports on durable goods orders and new and existing home sales are also likely to attract attention in the coming days along with the Federal Reserve's Beige Book. Traders also looked ahead to the U.S. presidential election, with polls showing chances improving for former President Donald Trump, the Republican candidate. Consumer and homebuilder stocks were among the biggest losers as fears about higher-for-longer interest rates crept up, with Target down 3.8% and Builders FirstSource off by 5.2%. Lennar also shed 4.4%.

Source: TA Research - 22 Oct 2024