Awaiting Clarity on Trump Administration Policies

The local benchmark rose on Monday, buoyed by reports of a positive phone call between incoming US President Donald Trump and Chinese President Xi Jinping as well as the release of China’s fourth-quarter GDP growth data, which beat market expectations. The FBM KLCI added 5.62 points to close at 1,572.34, off an early low of 1,563.48 and high of 1,575.11, as gainers edged losers 628 to 397 on total turnover of 2.95bn shares worth RM2.45bn.

Support at 1,550/1,529; Resistance at 1,580/1,605

Investors should be sidelined as they await key interest rate decisions both locally and from within the region along with greater clarity on the policy direction of the Donald Trump administration. Immediate index support remains at 1,550, with stronger supports at the 6/8/24 low of 1,529 and 1,500 psychological level. Immediate resistance is maintained at 1,580, with the next hurdles at 1,605 and 1,630, followed by 1648.

Bargain Gamuda & SunCon

Gamuda is attractive to bargain for recovery upside towards the 50-day ma (RM4.63), with a convincing breakout above the 100%FP (RM4.89) to target the 08/01/25 high (RM5.38) going forward. Key retracement support is from the 61.8%FR (RM3.95) and the 50%FR (RM3.66). Likewise, SunCon shares are set for a potential oversold rebound towards the 61.8%FR (RM3.83), with tougher upside hurdles at the 76.4%FR (RM4.32) and RM4.71 ahead, with crucial chart supports at the 50%FR (RM3.43) and the 38.2%FR (RM3.02) cushioning downside.

Asian Markets Higher Ahead of Trump Inauguration

Asian markets were mostly higher Monday, following a positive conversation between Donald Trump and Chinese leader Xi Jinping ahead of the US President-elect’s inauguration. A gauge of major Chinese firms listed in Hong Kong rose as much as 2.5%, after Trump described the pre-inauguration talk between the two leaders as “very good.” Trump and Xi discussed trade, TikTok and fentanyl, which may set the tone for relations in the early days of the new administration. Adding to the positive sentiment, TikTok started restoring service in the US on Sunday as Trump said he would halt enforcement of a law requiring the app’s Chinese owner to find a buyer for three months.

Still, traders are bracing for the first days of Trump’s second term. He’s planning a flurry of executive orders around immigration, energy, federal workers and regulatory reform, to quickly implement his policy agenda upon taking office. U.S. markets will be closed for Martin Luther King Jr. Day, so global liquidity will be lighter than usual, and U.S. debt ceiling jitters are back in sharp focus. Hong Kong’s Hang Seng index jumped 1.75% to 19,925.81, while the Shanghai Composite added 0.08% to 3,244.38. Japan’s Nikkei 225 also gained 1.17% to 38,902.50 and the Topix rose 1.19% to 2,711.27. Australia’s S&P/ASX 200 added 0.45% to 8,347.40, while South Korea’s blue-chip Kospi inched down by 0.14% to 2,520.05.

European Markets Close Higher as Trump Pauses on Tariffs

Major European markets finished higher overnight, after an official for incoming U.S. administration said President Donald Trump would not impose new trade tariffs on his first day in office, alleviating some fears of an immediate blitz. The pan European Stoxx 600 edged up 0.05%. The U.K.'s FTSE 100 gained 0.18%, Germany's DAX climbed 0.42% and France's CAC 40 closed up 0.31%, while Switzerland's SMI settled higher by 0.39%. U.S. financial markets are closed for Martin Luther King Jr. Day. Trump was sworn in as president and promised to sign a series of executive orders the same day. For now, those will not include new tariffs on the three biggest US trading partners.

The incoming administration has pivoted away from a full-blown trade war, toward potential engagement with Beijing, according to people familiar with the plans. Trump plans to issue a broad memorandum that directs federal agencies to study existing trade policies and relationships with China, Canada and Mexico, In December, Trump threatened the European Union with tariffs unless it reduced its trade deficit with the U.S. through oil and gas purchases.

Source: TA Research - 21 Jan 2025