Extend Drift Down Amid Lingering China Growth Worries

Blue chips were range bound on Tuesday, as early gains gave way to profit-taking amid prevailing worries over China’s economic growth momentum and potential rise in US-China trade tensions. The FBM KLCI slipped 0.83 to close at 1,608.43, after ranging within early high of 1,615.96 and low of 1,605.43, as losers beat gainers 602 to 413 on improved trade totaling 2.99bn shares worth RM2.54bn.

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

Stocks should extend drift down amid lingering concerns over China’s growth potential given the absence of significant stimulus to boost the economy. 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 CIMB & Maybank

CIMB would need to overcome the 20/09/24 high (RM8.50) to extend upside momentum towards the 176.4%FP (RM8.70), with stronger resistance seen at the 200%FP (RM9.28), and crucial support coming from the 150%FP (RM8.05) and 138.2%FP (RM7.75). Maybank shares need sustained breakout above the 138.2%FP (RM10.58) to boost potential upside towards the upper Bollinger band (RM10.74), with next hurdle at the 150%FP (RM10.83), while support at the lower Bollinger band (RM10.35) the 123.6%FP (RM10.28) cushion downside.

Asian Markets Fell as US Post-Election Rally Fail to Spillover

Asian markets fell Tuesday, with investors exercising caution even as U.S. stocks continued their post-election rally, with key benchmarks closing at record highs. Investors also assessed economic data from the region, including a survey from the National Australia Bank on business conditions and Indonesia's September retail sales. India will be reporting its consumer price index reading for October, and oil cartel OPEC will release its monthly oil market report later in the day.

Hong Kong's Hang Seng index dropped 2.84%, while mainland China's CSI 300 shed 1.1% to end at 4,085.74. Australia's S&P/ASX 200 closed 0.13% lower at 8,255.6. South Korea's Kospi fell by 1.94% to close at 2,482.57, while the Kosdaq Index dropped 2.51% to 710.52. Japan's Nikkei 225 slipped 0.4% to close at 39,376.09. The Topix ended the trading day around the flatline at 2,741.52.

Wall Street Slips on Profit Taking

Wall Street’s major indexes fell overnight as traders booked profits following post-election gains over the past few days, while focus moved to key inflation data later in the week. The Dow Jones Industrial Average dropped 0.86% to close at 43,910.98. The S&P 500 slipped 0.29% to 5,983.99, while the Nasdaq Composite inched down 0.09% to 19,281.40. The weakness on Wall Street may partly reflect profit taking, as some traders look to cash in on the recent strength in the markets. Trump's return to the White House is expected to be positive for corporations and the U.S. economy, although there are some concerns about the effect of planned tariff increases will have on inflation.

Traders seem reluctant to make more significant moves ahead of the release of closely watched economic data in the coming days. A highly anticipated report on consumer price inflation is due to be released late Wednesday, while reports on producer price inflation, retail sales and industrial production are likely to attract attention later in the week. Boeing was a laggard in the Dow, falling more than 2.5%, as the company posted sharp declines in October due to worker strikes. Shares of Tesla, which have advanced 31% since Election Day, sank 6.1% on Tuesday, while Trump Media & Technology Group fell nearly 9%.

Source: TA Research - 13 Nov 2024