Cautious Ahead of US Employment Data

Blue chips drifted lower on Thursday, as the minutes from the latest U.S. Federal Reserve meeting indicated it could slow the pace of policy easing this year over inflation concerns from the planned policies of the incoming Trump administration. The FBM KLCI lost 14.02 points to end near session lows at 1,600.81, off an opening high of 1,618.17, as losers bashed gainers 900 to 231 on total turnover of 3.49bn shares worth RM2.93bn.

Support at 1,600/1,588; Resistance at 1,648/1,675

Investors should remain cautious ahead of the weekend, as they look towards U.S. employment data this week for further cues on the trajectory of U.S interest rates. Immediate index support is at 1,600, with better supports at 1,588, which is the 38.2%FR level, followed by 1,565, the 23.6%FR level, with next crucial support at 1,550. Immediate resistance remains at 1,648, followed by the September peak of 1,675 with tougher resistance seen at the 1,684 high (29 Aug).

Bargain Globetronics & SKP Resources

Globetronics looks attractive to bargain at current levels for rebound upside towards the 138.2%FP (65sen), while a confirmed breakout should aim for the 123.6%FP (77sen) and 100%FP (97sen) ahead. Support from the 161.8%FP (45sen) and 176.4%FP (33sen) limits downside risk. Likewise, SKP Resources is attractive to bargain for recovery upside towards the 38.2%FR (RM1.23), with a convincing breakout above the 23.6%FR (RM1.37) to target RM1.50 going forward. Crucial support comes from the 61.8%FR (RM1.01) and 76.4%FR (87sen).

Asian Markets Dip Amid Concerns Over Trump’s Tariff Plans

Asian markets fell on Thursday as concerns persist over sticky inflation exacerbated by President-elect Donald Trump’s plans for fiscal stimulus. Minutes of the Fed's December policy meeting, released on Wednesday, showed officials' concern that President-elect Donald Trump's proposed tariffs and immigration policies may prolong the fight against rising prices. Trump is looking to the emergency powers to provide a legal basis for his proposed hefty and wide-ranging tariffs. A gloomy outlook for China’s economy is also adding pressure on regional markets as the latest inflation readings suggest that Beijing’s stimulus efforts have so far failed to revive demand.

Next up is Friday’s U.S employment report, which may shed more light on the Federal Reserve’s policy outlook. US stock markets will close Jan. 9, in observance of a National Day of Mourning for former President Jimmy Carter. Australia’s S&P/ASX 200 fell 0.24% to 8,329.90, while South Korea’s Kospi close nearly unchanged at 2,521.90. Japan’s Nikkei 225 lost 0.94% to 39,605.09 and the Topix dropped 1.23% to 2,735.92. In mainland, the Shanghai Composite fell 0.58% to 3,211.39, while the Hang Seng Index lost 0.2% to end at 19,240.89.

Mining, Healthcare Stocks Boost European Markets

Major European markets finished slightly higher overnight, driven by a rally in healthcare and mining sectors, despite uncertainties over monetary policy and U.S. tariff plans, which kept bond markets on edge. The pan-European Stoxx 600 gained 0.42%. The U.K.’s FTSE 100 closed up 0.83%, France’s CAC added 0.51% and Italy’s FTSE MIB gained 0.59%. Germany's DAX edged down 0.06%. The sector jumped 1.5% and hit a three-week peak earlier in the session. It also logged its best day in a month. London-listed mining companies such as Antofagasta, Anglo American, and Rio Tinto fueled this surge, with their shares climbing between 1.5% and 3.3%. Healthcare stocks were the biggest boost to the benchmark index, rising 1%.

However, concerns over rising inflation and slim chances of more interest rate cuts loomed large over the market. Traders were also on edge about how U.S. President-elect Donald Trump might steer foreign and economic policy, especially with talks of a potential national economic emergency to justify universal tariffs. Such prospects have driven bond yields skyhigh globally. Trading volumes were a bit thin as U.S. markets are closed in honor of former U.S. President Jimmy Carter, who died in late December at age 100. A state funeral for the country's 39th president is taking place today.

Source: TA Research - 10 Jan 2025