Drift Down on China Growth Worries

Bursa Malaysia shares sank on Monday, dragged by regional falls after China’s softer inflation data and weaker-than-expected stimulus package disappointed investors. The FBM KLCI fell 11.98 points to end near session lows at 1,609.26, off an early high of 1,627.23, as losers beat gainers 685 to 357 on total turnover of 2.68bn shares worth RM2.03bn.

Support at 1,600/1,595; Resistance at 1,648/1,660

The local market should drift lower near-term as worries over China’s economic growth momentum amid potential worsening US-China trade tensions dampen sentiment. Immediate index support stays at the 1,600 psychological level, with the next crucial support coming in at the 200-day moving average level of 1,595, and next at 1,575, the 76.4%FR level. Immediate resistance is at the recent high of 1,648, with the next upside hurdles seen at 1,660 and 1,675.

Bargain DNEX & Tenaga

DNEX remains in base building mode, with the lower Bollinger band (34sen) and 18/1/24 low (31.5sen) acting as key chart supports, while a breakout above the 200-day ma (39sen) is crucial to fuel further upside towards the 61.8%FR (45sen) and 50%FR (50sen) ahead. Tenaga is rebuilding a stronger support platform above the 76.4%FR (RM13.68), while a confirmed breakout above the 4/9/24 high (RM14.98) should target the 123.6%FP (RM16.30) and 138.2%FP (RM17.11) going forward.

Asian Markets Fell as China Data and Stimulus Underwhelm

Asian markets fell Monday after China’s latest stimulus measures underwhelmed and its October inflation numbers came in lower than expected, prompting concerns over the recovery in the world’s second-largest economy. Beijing announced a five-year stimulus package worth 10 trillion yuan to tackle local government debt problems on Friday, but analysts doubt it is enough to meaningfully stimulate growth. The country’s inflation rate declined to 0.3%, missing expectations of 0.4% and lower than the 0.4% seen in September. Inflation fell for a second straight month and dropped to its lowest in four months.

Hong Kong’s Hang Seng index fell 1.45% to end at 20,426.93, while mainland China’s CSI 300 climbed 0.66% to 4,131.13. Japan’s benchmark Nikkei 225 was marginally higher at 39,533.32, while the broad-based Topix slipped 0.09% to close at 2,739.68. South Korea’s Kospi was down 1.15%, ending at 2,531.66 and marking its lowest level since Sept. 11, and the small-cap Kosdaq fell 1.96% to finish at 728.84. Australia’s S&P/ASX 200 was down 0.43%, closing at 8,266.2.

Wall Street End Higher as Optimism for Trump Presidency Continues

Wall Street's major indexes ended higher overnight as bullish sentiment from Donald Trump’s election win and the Fed’s rate cut last week continued. The Dow Jones Industrial Average went up 0.69% to close at 44,293.13 while the S&P 500 rose 0.1% to 6,001.35. Meanwhile, the Nasdaq edged up 0.06% to settle at 19,298.76. Banking stocks closed higher as investors anticipated an easing of regulations for the sector upon Trump’s return to the White House, with JPMorgan Chase and Goldman Sachs rising 0.96% and 2.22%, respectively.

Declines were seen among technology stocks with the exception of Tesla, which rallied 8.96% fueled by expectations the automaker will benefit from CEO Elon Musk's relationship with the president-elect. On the economic front, consumer price inflation, retail sales, and industrial production data due this week will offer key insight for the Fed’s future monetary policy outlook.

Source: TA Research - 12 Nov 2024