Under Pressure from Strong USD and Likely Trump Return

Blue chips ended lower on Thursday, mirroring declines on Wall Street and the region as US treasury yields spike on concerns interest rate cuts may be more measured. The FBM KLCI fell 9.3 points to close at the day’s low of 1,632.23, off an early high of 1,643.08, as losers swarmed gainers 712 to 312 on lower turnover of 2.65bn shares worth RM2.28bn.

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

The local stock market may stay under pressure ahead of the weekend, given the weaker regional sentiment amidst the stronger US currency as markets speculate on an increasingly likely return of Donald Trump to the White House. 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 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 Genting Berhad & GENM

Genting Bhd. will need to overcome the 23.6%FR (RM4.15) to sustain further upside momentum towards the 38.2%FR (RM4.32) and 200-day ma (RM4.50), while important chart support is at RM3.80. Genting Malaysia need confirmed breakout above the 23.6%FR (RM2.38) to extend further recovery towards the 38.2%FR (RM2.46) and 50%FR (RM2.52) ahead, with support at RM2.20 capping downside risk.

Asian Markets Slip on Rate Worries

Stocks in Aisa fell on Thursday, as traders scaled back bets on US interest-rate cuts and assessed economic data from the region. The combination of higher U.S. Treasury yields and growing bets the Federal Reserve may be more restrained in their easing pace capped risk sentiment. Adding to the market nerves is rising expectations of a possible return of Donald Trump to the White House. On economic front, South Korea narrowly avoided a technical recession with its third-quarter GDP growing 0.1% quarter on quarter, following a 0.2% contraction in the second quarter.

Separately, Japan's factory activity contracted for the fourth straight month in October on subdued demand and weak orders, a private-sector survey showed on Thursday. Australia’s S&P/ASX 200 slipped 0.12% to 8,206.3 and South Korea’s Kospi fell 0.72% to 2,581.03. The Shanghai Composite Index also fell 0.68% to 3,280.26, while Hong Kong’s Hang Seng Index dropped 1.3% to 20,489.62. Japan’s Nikkei 225 was the notable outlier, reversing losses to gain 0.1% and close at 38,143.29, but the Topix lost 0.05% and ended at 2,635.57.

Wall Street Mixed as Traders Assess Earnings, Economic Data

Wall Street's major indexes ended mixed overnight as traders sifted through the latest corporate earnings reports and economic data for further clues about rate cuts. The Dow Jones Industrial Average lost 0.33% to end at 42,374.36. The S&P 500 gained 0.21% to 5,809.86 and the Nasdaq Composite added 0.76% and closed at 18,415.49. Tesla was the bestperforming stock in the broad market index. The electric vehicle manufacturer surged nearly 22% after posting third-quarter results that beat analysts’ expectations, registering its best day since 2013. On the other hand, a nosedive by shares of IBM weighed on the Dow, with the tech giant plunging by 6.2% after reporting weaker than expected third quarter revenues.

Fellow Dow component Honeywell also tumbled by 5.1% after the conglomerate reported better than expected third quarter earnings but revenue missed estimates. Roughly 160 S&P 500 companies have posted quarterly results so far, but their earnings growth has been underwhelming. On economic news, initial jobless claims fell to 227,000 in the latest week, fewer than economists expected. Sales of new single-family homes in the U.S. rose 4.1% in September, more than economists projected.

Source: TA Research - 25 Oct 2024