Cautious as Market Awaits US Election Results

Bursa Malaysia shares ended higher on Monday driven by bargain hunting interest in plantation stocks after a rally in crude palm oil prices sparked by shrinking supplies amid surging exports. The FBM KLCI rose 12.45 points to close at the day’s high of 1,616.43, off an opening low of 1,607.75, as gainers led losers 537 to 485 on total turnover of 2.42bn shares worth RM2.15bn.

Support at 1,600/1,591; Resistance at 1,630/1,648

Market sentiment will remain cautious as investors await the results of the US presidential elections and the decision from the Federal Reserve’s next monetary policy meeting. Immediate support stays at the 1,600 psychological level, with next crucial support coming in at the 200-day moving average level of 1,591, and next at 1,575, the 76.4%FR level. Immediate resistance is from last week’s high of 1,630, then 1,648, with next upside hurdles at 1,660 and 1,675.

Bargain Maxis & TM

Any further dips on Maxis towards the 38.2%FR (RM3.42) chart support should attract bargain hunting interest for rebound upside towards the 61.8%FR (RM3.76), with tougher resistance coming from the upper Bollinger band (RM3.84) and 76.4%FR (RM3.97). TM is in base building mode, with key chart supports at the 200-day ma (RM6.27) and 61.8%FR (RM6.07) cushioning downside, while a breakout above the 100-day ma (RM6.66) should target the 100%FP (RM7.05) and 123.6%FP (RM7.66) ahead.

Asian Markets Rise Ahead of US Presidential Election

Asian markets rose on Monday, as traders await the U.S election outcome and US Fed's monetary policy announcement later in the week. Polls released on Sunday showed the two candidates poised for a photo finish, with voters narrowly split both nationally and across the pivotal swing states. The looming question remains how a Donald Trump or Kamala Harris victory will shape the market narrative for the rest of the year and beyond. Analysts believe Trump's policies on immigration, tax cuts and tariffs would put upward pressure on inflation, bond yields and the dollar, while Harris was seen as the continuity candidate. Elsewhere in China, the country’s Standing Committee of National People’s Congress meets in Beijing Monday through Friday, as traders watch for any approval of fiscal stimulus to revive the slowing economy.

It's not the only big event of the week ahead. On Thursday, the Federal Reserve will announce its latest policy decision, with markets largely anticipating that the central bank will cut interest rates by a quarter percentage point. South Korea’s Kospi gained 1.83% to 2,588.97, while the small-cap Kosdaq jumped 3.43% to 754.08. The Shanghai Composite Index also jumped 1.17% to 3,310.21 and Hong Kong’s Hang Seng Index added 0.3% to 20,567.52. In Australia, the S&P/ASX 200 closed 0.56% higher at 8,164.60 and markets in Tokyo were closed for a holiday.

Wall Street Slip on Election Nerves

Wall Street's major indexes slipped in choppy trade overnight, as traders prepared for a crucial week in which Americans will elect a new president and the Federal Reserve will announce its policy statement. The Dow Jones Industrial Average fell 0.61% to close at 41,794.60. The S&P 500 lost 0.28% to 5,712.69, while the Nasdaq Composite fell 0.33% to 18,179.98. The presidential election saw candidates Donald Trump and Kamala Harris both scrambling for an edge in the last full day of a race that polls show as extremely close. It could take days to determine the victor. The results of House and Senate races are also likely to be in focus, as the makeup of Congress could affect how much the next president can accomplish.

Also looming large is the Fed's two-day policy meeting, kicking off a day later than usual on Wednesday in light of the election. Traders are convinced that Chair Jerome Powell will usher in a 0.25% rate cut on Thursday, despite signs of stubborn inflation and muddied job market signals. A small rally for Nvidia helped stabilize the market after S&P Dow Jones Indices announced late Friday that the chipmaker would replace rival Intel in the 30-stock Dow. Nvidia is up 180% year to date, while Intel has lost more than half of its value in 2024.

Source: TA Research - 5 Nov 2024