Upbeat on Easing Trade Worries

The local market extended its rebound on Wednesday, driven by further recovery among construction, property and technology heavyweights that suffered selloffs sparked by concerns over their data center investments. The FBM KLCI added 9.95 points to close at 1,574.51, off an early low of 1,564.43 and high of 1,576.45, as gainers led losers 622 to 345 on better turnover of 2.86bn shares worth RM2.33bn.

Resistance at 1,605/1,630; Support at 1,550/1,529

Market sentiment should remain upbeat on easing concerns over a full-blown US-China trade war, amid hopes that there may be opportunities for concession deals to delay or lower trade tariffs, as with Mexico and Canada. Immediate index resistance is maintained at 1,605, with next upside hurdles at 1,630, followed by 1648. Immediate support remains at 1,550, with stronger supports at the 6/8/24 low of 1,529 and 1,500 psychological level.

Bargain SKP Resources & VSI

SKP Resources is attractive to bargain ahead of an oversold rebound towards the 50%FR (RM1.12), with the 38.2%FR (RM1.23) and 23.6%FR (RM1.37) as next upside hurdles, while key chart supports comes from the 06/08/24 low (95sen) and the 76.4%FR (87sen). VSI will need breakout confirmation above the 76.4%FR (RM1.17) to boost upside momentum towards the 15/08/24 high (RM1.25), with next major resistance from the 15/07/24 peak (RM1.32). Crucial support at the 50%FR (RM1.00) and 38.2%FR (93sen) limits downside risk.

Asian Markets Mixed as Traders Digest Tariff Developments

Asian markets ended mixed Wednesday as traders digest the latest developments regarding President Donald Trump's tariffs and economic data from the region. The first volleys in the latest US-China trade war made clear that Xi Jinping is taking a more cautious approach than during Donald Trump’s first term. After the US leader gave last-minute reprieves to Canada and Mexico, his 10% tariffs on China took effect on Tuesday. Beijing swiftly announced additional tariffs on roughly 80 products to take effect on Feb. 10, but traders are hoping upcoming talks will ease tensions. On the economic front, South Korea’s consumer price index for January rose 0.7% month on month and 2.2% annually, surpassing Reuters 1.97% estimate.

Separately, Japan's service activity expanded for a third straight month in January, helped by a rebound in new export business on Asian demand, a private-sector survey showed on Wednesday. Japan’s Nikkei 225 gained 0.09% to 38,831.48, while the Topix added 0.27% to 2,745.41. South Korea’s Kospi also gained 1.11% to 2,509.27 and Australia’s S&P/ASX 200 rose by 0.51% to 8,416.90. In Hong Kong, the Hang Seng Index lost 0.93% to 20,597.09, while the Shanghai composite fell 0.65% to 3,229.49.

Wall Street Edges Higher Traders Look Pass Political Turmoil

Wall Street’s main closed higher overnight, rebounding from declines earlier in the session as traders digest disappointing earnings and looked past the political turmoil that weighed on the market earlier in the week. The Dow Jones Industrial Average gained 0.71% to close at 44,873.28. The S&P 500 rose 0.39% to 6,061.48, while the Nasdaq Composite added 0.19% to 19,692.33. The initial pullback on Wall Street came as traders digest earnings news from Alphabet and Advanced Micro Devices. Shares of Alphabet shares tumbled 8% after the Google-parent posted a cloud revenue miss as it ramps up spending on artificial intelligence. AMD shares were also lower by 7% after the company’s fourth-quarter data center revenue came up short of expectations.

Selling pressure has waned over the course of the session, however, as traders appeared to look past U.S. President Donald Trump's declaration on Tuesday that the United States would take over the Gaza Strip, a move that underscored the likelihood of market volatility under the new administration. Nvidia jumped more than 5% after the server maker Super Micro Computer announced full production availability of its AI data center with Nvidia’s Blackwell platform. Amgen also helped the Dow’s advance in the session, as the stock jumped 6% on the heels of its better-than-expected adjusted earnings and revenue for the fourth quarter.

Source: TA Research - 6 Feb 2025