Investors Await Potential China Stimulus

The local benchmark index rose for a third straight session on Wednesday, led by bargain hunting interest in technology stocks after the US implemented a new round of semiconductor export restrictions on 136 Chinese companies, potentially benefiting local chip exporters. The FBM KLCI added 7.13 points to close at 1,614.09, off an opening low of 1,606.53 and high of 1,616.03, as gainers led losers 727 to 381 on improved trade totaling 3.6bn shares worth RM3.3bn.

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

Blue chips should stay range bound with upward bias as investors are optimistic for potential economic stimulus measures in China’s upcoming Central Economic Work Conference next week. 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 Gadang & Hiap Teck

Gadang will be attractive to accumulate on weakness for recovery upside towards the 23.6%FR (33sen), with stronger upside hurdles at 38.2%FR (37sen) and the 50%FR (40sen), while key chart supports are at the 14/03/23 low (28sen) and 25sen. Hiap Teck need to climb above the 50%FR (35sen) convincingly to aim for the 61.8%FR (39sen), and 76.4%FR (43sen) going forward, while crucial support from the 38.2%FR (31sen) and 23.6%FR (27sen) cushions downside.

Asian Markets Lower as Investors Digest South Korea Politics

Asian markets were trading lower on Wednesday as investors digested political events in South Korea. Japan’s Nikkei 225 ended nearly flat at 39,276.39, while the Topix dropped 0.47% to 2,740.6. Mainland China’s CSI 300 fell 0.54% to end trading at 3,930.56, while Hong Kong’s Hang Seng index closed flat at 19,742.46. Investors also assessed GDP data out of Australia, which showed economic growth come in slower than expected in the third quarter, as elevated borrowing costs and sticky inflation continued to weigh on the country. Australia’s S&P/ASX 200 fell 0.38% to end the trading day at 8,462.6.

South Korean markets fell as pressure mounted on President Yoon Suk Yeol to step down after he imposed and then lifted a martial law decree within hours. The country’s Kospi index dropped 1.44% to end at 2,464, and the Kosdaq fell 1.98% to 677.15, recovering some losses after dropping over 2% earlier in the day. A coalition of lawmakers from South Korea’s opposition parties put forward a bill to impeach Yoon on Wednesday afternoon, according to the spokesperson’s office of the main opposition Democracy Party. Amid fears of financial instability, the Bank of Korea said it would boost short-term liquidity and deploy measures to stabilize the FX market as required following an emergency board meeting.

Wall Street Ends Higher On Tech Stocks

Wall Street’s major indexes ended higher overnight, with the S&P 500 and the Nasdaq touching record highs propelled by gains in technology stocks, while traders digest comments from Federal Reserve Chair Jerome Powell. The Dow Jones Industrial Average rose 0.69% to close at 45,014.04. The S&P 500 gained 0.61% to 6,086.49, while the Nasdaq Composite jumped 1.30% to 19,735.12. Salesforce stock surged more than 10% after the software maker's quarterly revenue beat boosted hopes for its artificial intelligence products. Cloud and ecommerce giant Amazon hit intraday all-time highs, while AI chip darling Nvidia gained over 3%, nearing its own record. Markets kept moving higher as Powell spoke at the New York Times DealBook Summit and did little to shake trader’s confidence that the Fed will cut interest rates at its December meeting.

Powell touted a US economy in "remarkably good shape" as a reason he feels the Fed can be "afford to be a little more cautious" in its interest rate cutting path. Optimism about the outlook for interest rates may also be contributing to the strength on Wall Street following the release of some weaker than expected U.S. economic data. Payroll processor ADP released a report this morning showing private sector employment in the U.S. increased by slightly less than expected in the month of November.

Source: TA Research - 5 Dec 2024