Investors Optimistic Over December US Fed Rate Cut

Bursa Malaysia shares extended gains in line with neighbouring markets on Tuesday following positive cues from Wall Street where major indices surged to new records. The FBM KLCI climbed up 11.48 points to end at the day’s high of 1,606.96, off an early low of 1,594.07, as gainers led losers 683 to 432 on higher turnover of 3.32bn shares worth RM3.31bn.

Resistance at 1,629/1,648; Support at 1,588/1,565

Market sentiment should be buoyed as investors remain optimistic about an interest rate cut by the US Fed after Federal Reserve Governor Christopher Waller mentioned that he is ‘leaning toward’ a December rate cut. Immediate index resistance remains at 1,629, next 1,648, followed by the September peak of 1,675. Immediate support stays 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.

Bargain Maxis & TM

Investors should look to accumulate Maxis shares on weakness towards the key 38.2%FR (RM3.37) or 23.6%FR (RM3.16) supports, for recovery upside to the 61.8%FR (RM3.72) and 76.4%FR (RM3.93) ahead. Meanwhile, TM shares will need confirmed breakout above the upper Bollinger band (RM6.58) to extend uptrend towards the 16/07/24 high (RM7.05), with a higher upside target at the 123.6%FP (RM7.66). Key support from the 61.8%FR (RM6.07) and 50%FR (RM5.76) cushion downside risk.

Asian Markets End Higher After US Benchmarks Hit Record Highs

Asian markets rose Tuesday, tracking gains on Wall Street after the S&P 500 and the Nasdaq Composite rose to new records overnight. Japan’s Nikkei 225 traded 2.22% higher, and the Topix added 1.71%. South Korea’s Kospi was up 1.71% while the Kosdaq advanced 2.03%. South Korea’s inflation rate climbed in November to 1.5% year on year, higher than October’s inflation reading of 1.3%, and lower than the 1.7% expected by economists polled by Reuters. Hong Kong’s Hang Seng Index gained 1%, and mainland China’s CSI 300 was up 0.11% to close at 3,951.89. Australia’s S&P/ASX 200 rose 0.56% to close at 8,495.2.

Investors are preparing for a wave of economic reports and comments from US Federal Reserve officials that will influence the future direction of interest rates. Traders will be monitoring the U.S. November payrolls report, due Friday, which could provide insights into the strength of the labuor market ahead of the Federal Reserve’s policy meeting on Dec. 17- 18. Major Asian chip stocks outside of China rose, shrugging off a new round of U.S. semiconductor export curbs on Beijing aimed at impairing the country’s capability to produce certain high-end chips. Taiwan Semiconductor Manufacturing Company — the world’s largest contract chip supplier — saw shares rise 2.42%.

Wall Street Mixed as Traders Digest Fresh Economic Data

Wall Street’s major indexes ended mixed in choppy trading overnight traders digested fresh economic data ahead of crucial jobs report later this week. The Dow Jones Industrial Average fell 0.17% to close at 44,705.53. The S&P 500 inched higher by 0.05% to 6,049.88, while the Nasdaq Composite gained 0.40% to 19,480.91. The Job Openings and Labor Turnover Survey (JOLTS) showed fewer hires were made during the month while the quits rate, a sign of confidence among workers, rose to 2.1% from 1.9% in September.

The JOLTS data serves as the first in a wave of key signals this week that culminates in Friday's all-important monthly US payrolls report. The hotly anticipated monthly payrolls figures on Friday, a crucial metric in gauging the Fed's interest rate trajectory, are on top of investors' radar. Market watchers also digested reassuring comments from Federal Reserve policymakers. Two policymakers said they see inflation heading down to the U.S. central bank's 2% target and that the job market is "solid."

Source: TA Research - 4 Dec 2024