External Uncertainties Weigh Down Sentiment

Blue chips began the new year with a profit-taking pullback on Thursday, as market sentiment was dampened by weak economic data from China and major economies within the region. The FBM KLCI dropped 9.46 points to close at 1,632.87, off an opening high of 1,641.32 and low of 1,629.23, as losers edged gainers 580 to 449 on total turnover of 2.64bn shares worth RM1.97bn.

Resistance at 1,648/1,675; Support at 1,620/1,600

Uncertainties surrounding the inflationary impact of Donald Trump’s impending return to the White House and China’s weaker economic outlook will likely continue to weigh on local investor sentiment. Immediate index resistance remains at 1,648, followed by the September peak of 1,675 with tougher resistance seen at the 1,684 high (29 Aug). Immediate support is retained at 1,620, with better supports at 1,600 and 1,588, which is the 38.2%FR level, with next crucial support at 1,565, the 23.6%FR level, followed by the key 1,550 support.

Bargain Ekovest & WCT Holdings

Ekovest needs a convincing breakout above the 23.6%FR (39sen) to enhance upward momentum towards the 38.2%FR (43sen), with the next key upside hurdle at the 50%FR (47sen), while the 11/09/24 low (32sen) caps downside risk. Similarly, WCT Holdings shares need sustained strength above the 61.8%FR (RM1.01) to enhance upward momentum towards the 76.4%FR (RM1.14), with next resistance seen at RM1.25 ahead, while the 50%FR (90sen) limits downside risk.

Weak China Data Weigh on Asian Markets

Stocks in Asia kicked off the New Year on a weaker note Thursday as traders assessed fresh economic data from the region and stayed cautious ahead of Donald Trump's return to the White House. China’s Caixin/S&P Global manufacturing purchasing managers’ index for December fell to 50.5, missing economists’ forecast of 51.7 in a Reuters poll. PMI came in at 51.5 in November and 50.3 in October. Separately, Singapore’s economy expanded by 4.3% year on year in the fourth quarter of 2024, slower than the 5.4% growth in the previous quarter. The start of the New Year was shaping up to be a less favourable one for equities, as uncertainty over the policies of incoming U.S. President Trump and a more hawkish Federal Reserve outlook looked set to dominate the market rhetoric for now.

Traders are also closely monitoring China's economic recovery in 2025 after officials pledged a slew of support measures to promote growth, though Trump's talk of tariffs more than 60% on imports of Chinese goods could pose significant headwind. In mainland, the Shanghai Composite slumped 2.66% to 3,262.56 while the Hang Seng Index dropped 2.18% to 19,623.32. South Korea’s Kospi index closed nearly unchanged at 2,400.86 and Australia’s gained 0.52% to 8,201.20. Markets in Japan will remain closed for the rest of this week.

Wall Street Kick Off 2025 On Sour Note

Wall Street’s main indexes kicked off the first trading session of 2025 on a sour note overnight, as traders embarked on the new year facing the crosscurrents of solid labour market data and tumbling Tesla shares. The Dow Jones Industrial Average fell 0.36% to close at 42,392.27. The S&P 500 slipped 0.22% to 5,868.55, while the Nasdaq Composite fell 0.16% to 19,280.79. A report from the Labor Department showed initial and continuing claims for unemployment benefits both fell last week, supporting the narrative of a solid jobs market and adding weight to the possibility that the U.S. central bank could let its key interest rate stand at this month's policy meeting.

Shares of Tesla fell 6% after reporting its first annual drop in deliveries, as incentives failed to stem a decline in demand for its ageing line-up of electric vehicles. Tech giant Apple weighed on the market, falling more than 2% after the iPhone maker offered rare price discounts on its latest models in China, reflecting rising competition from local handset makers. The choppy session extended the dour end of 2024, when the S&P 500 fell for four straight days and took a bit of the sheen off stocks’ best two-year stretch in a quarter century

Source: TA Research - 3 Jan 2025