Sideways Amid China Growth and US-China Trade Concerns

The local blue-chip benchmark index recovered from early losses on Wednesday, as falls on core plantation stocks were offset by gains in utility and technology heavyweights. The FBM KLCI gained 3.07 points to settle at 1,611.50, off an early low of 1,602.71 and high of 1,611.54, but losers beat gainers 566 to 435 on cautious turnover of 2.83bn shares worth RM2.22bn.

Support at 1,600/1,596; Resistance at 1,648/1,660

The local market should trade sideways amid caution over China growth and US-China trade tensions and as investors assess key US inflation data for leads. Immediate index support stays at the 1,600 psychological level, with next crucial support coming in at the 200-day moving average level of 1,596, and next at 1,575, the 76.4%FR level. Immediate resistance is at the recent high of 1,648, with next upside hurdles seen at 1,660 and 1,675.

Bargain Aemulus & Inari

Any further dip on Aemulus should increase potential for oversold rebound going forward, with the 01/12/23 low (23sen) and 20sen acting as stronger support, and resistance coming from the 23.6%FR (30sen) and 38.2%FR (34sen) followed by stronger upside hurdle at 50%FR (38sen). Inari will need a convincing breakout above the 61.8%FR (RM3.27) to reinforce upside momentum towards the 76.4%FR (RM3.56) and RM3.80 ahead, while key support at the 38.2%FR (RM2.81) and lower Bollinger band (RM2.68) cushions downside risk.

Asian Markets Fall as Traders Await U.S. Inflation Data

Asian markets fell on Wednesday, with traders reluctant to make more significant moves ahead of key inflation data that may further sap confidence in the pace of Federal Reserve interest-rate cuts. Traders were positioning ahead of US data due late Wednesday, which is expected to show that the overall consumer price index probably increased 0.2% for the fourth month, while the year-over-year measure is projected to have accelerated for the first time since March. In addition, market watchers expect US president-elect Donald Trump’s proposed tax and tariff policies to further drive-up inflation, with his key picks for administration posts signaling a tough stance against China.

In economic news, data from Japan showed year-on-year producer price growth, or wholesale inflation, in October reached its highest since July last year at 3.4%. That was higher than the 3% growth expected by economists polled by Reuters, and the 2.8% rise in September. Australia’s S&P/ASX 200 fell 0.75% to end at 8,193.40, while South Korea’s Kospi dropped 2.64% to end at 2,416.93. Japan’s Nikkei 225 also dropped 1.61% to 38,742.56 and the Topix lost 1.21% to 2,708.42. Hong Kong’s Hang Seng Index eased 0.12% to 19,823.45, while the Shanghai Composite bucked the losing trend across the region to close 0.52% higher at 3,439.88.

Wall Street Subdued as Traders Assess Economic Data

Wall Street’s major indexes traded in a narrow range overnight as traders assessed new consumer inflation data and the path of interest rates from the Federal Reserve. The Dow Jones Industrial Average inched up 0.11% to close at 43,958.19. The S&P 500 ended nearly unchanged at 5,985.38, while the Nasdaq Composite fell 0.26% to 19,230.74. The choppy trading on Wall Street comes after the Labor Department released closely watched consumer price inflation data that came in line with economist estimates. The Labor Department said the consumer price index rose 0.2% for the fourth straight month, in-line with expectations of economists polled by Reuters.

After the inflation report, fed funds futures trading suggested a high likelihood that central bank policymakers would cut rates again in December, according to the CME Fed Watch tool. Other notable economic data releases later this week include the producer price index data and retail sales figures, which will be announced late Thursday and Friday, respectively. Meanwhile, Minneapolis Fed President Neel Kashkari said that based on the headline numbers, he’s confident inflation is headed in the right direction.

Source: TA Research - 14 Nov 2024