Market Awaits China Stimulus Details

Blue chips edged lower on Tuesday amid a lack of local positive catalysts, while investors assess the potential market impact of the tariffs and cabinet appointments proposed by Donald Trump. The FBM KLCI shed 1.7 points to 1,602.34, off an early low of 1,601.02 and high of 1,608.88, but gainers led losers 565 to 438 on moderate trade totaling 2.83bn shares worth RM2.08bn.

Support at 1,588/1,565; Resistance at 1,630/1,648

Investors will likely remain sidelined as they await clearer direction from China’s fiscal stimulus measures coming out of the Global Financial Leaders Investment Summit being held by the Hong Kong Monetary Authority. Immediate index support rests at 1,588, the 38.2%FR of the 1,529 low (6 Aug) to 1,684 high (29 Aug) rally, with stronger key supports at 1,565, the 23.6%FR level, and then 1,550. Immediate resistance will be at 1,630, next 1,648, the 76.4%FR level, followed by the September peak of 1,675.

Bargain Dialog & Wasco

Further price dips in Dialog shares should attract bargain hunters looking for rebound upside to the 50%FR (RM2.16), with next major resistance coming from the 61.8%FR (RM2.28) and 71.4%FR (RM2.43), going forward while immediate support at RM1.79 and 10/17/22 low (RM1.65) cap downside risk. Meanwhile, Wasco will need a sustained climb above the upper Bollinger band (RM1.16) to strengthen recovery before meeting overhead resistance from the 200-day ma (RM1.25) and the 76.4%FR (RM1.35) ahead, with downside risk capped by the 38.2%FR (92sen) and at 65sen.

Asian Markets Rise as Traders Digest Chinese Policymaker’s Speech

Stocks in Asia ended higher Tuesday as traders parse Chinese financial policymakers’ speech at an investment summit in Hong Kong and awaited President-elect Donald Trump's cabinet selection. Traders in Aisa are reassessing the outlook for further stimulus and the country’s guidance on boosting corporate valuation. Chinese Vice Premier He Lifeng vowed to boost Hong Kong’s competitiveness by investing in the city’s innovation and delivering supportive financial policies. Traders also appear to be gauging the potential impact of a new Trump administration’s policies on the economy, and the possibility that the Fed may slow down its rate-cutting campaign.

Trump has begun making appointments, filling health and defense roles last week, but key positions for financial markets have yet to be announced. Australia’s S&P/ASX 200 traded 0.89% higher to close at 8,374. Japan’s Nikkei 225 closed 0.51% higher at 38,414.43, while the Topix advanced 0.68% to 2,710.03. South Korea’s Kospi traded 0.12% higher to end at 2,471.95. In mainland, the Shanghai Composite Index rose 0.67% to 3,346.01, while Hong Kong’s Hang Seng Index gained 0.44% to 19,663.67.

Tech Stocks Lifts Nasdaq, S&P 500

The Nasdaq and S&P 500 recovered from steeper losses overnight, led by a jump in technology shares as traders shrugged of concerns of mounting geopolitical tensions between Ukraine and Russia. The S&P 500 gained 0.40% to 5,916.98, while the Nasdaq Composite jumped 1.04% to 18,987.47. However, the Dow Jones Industrial Average fell 0.28% to close at 43,268.94. The early weakness on Wall Street came amid concerns about escalating tensions between the U.S. and Russia. After President Joe Biden gave Ukraine permission to attack Russian territory using U.S.-made long-range missiles, Russian President Vladimir Putin has signed a decree amending the country's nuclear doctrine.

Selling pressure waned shortly after the start of trading, however, with an advance by shares of Nvidia helping lead the turnaround by the Nasdaq. Nvidia rallied 4.9% as traders look forward to the chipmaker's latest quarterly earnings report on late Wednesday. Tesla rose 2%, bringing its month-to-date rally to 38%. Retail giant Walmart has also shown a notable move to the upside after reporting better than expected third quarter results and raising its full-year guidance.

Source: TA Research - 20 Nov 2024