Temporary bottom seen at 1,589-1,600 ahead of US polls and FOMC meeting results 

Technical Stockpick: LHI

KLCI: 1620.7 (4.3)
DOW: 42221.88 (427.3)
MSCI Asia: 187.9 (1.6)
FCPO (RM): 4791 (-15)
BRENT (USD): 75.53 (0.45)
USDMYR: 4.346 (-0.028)
SGDMYR: 3.2987 (-0.022)
EURMYR: 4.7337 (-0.032)
AUDMYR: 2.8758 (-0.009)
GBPMYR: 5.6422 (-0.032)
US: 10-yr yield (%) 4.2708 (-0.014)
BNM:10-yr yield (%) 3.9 (-0.02)

Asia/US. Most Asian bourses ended higher in thin trading, awaiting the key US polls (Nov 5) and FOMC meeting (Nov 7) results. Sentiment was bolstered by strong China PMI services data, along with upbeat remarks from Li Qiang that the country would meet its GDP target for the year following a series of fiscal and monetary stimulus measures from Beijing. The Dow jumped 428 pts to 42,222 as investors reacted to strong US PMI services data and awaited the outcome of the contentious US polls. Attention is also on the Fed’s policy decision on Nov 7, with traders pricing in a 99% chance of a 25-bps cut, following Sep's 50-bps reduction.

Malaysia.  Tracking higher regional markets, KLCI rose for the 3rd consecutive session (+4.3 pts to 1,620.7) after sliding 95 pts from YTD high of 1,684 to 1,589 (2M low) last Friday. Market breadth was positive at 1.09 vs 1.11 previously, supported by 2.59bn shares traded valued at RM2.47bn. Foreign selling resumed (-RM169m, Nov: -RM78m, YTD: +RM1.70bn) alongside local retailers (-RM24m, Nov: -RM112m, YTD: -RM4.83bn) while local institutions (+RM193m, Nov: +RM190m, YTD: +RM3.14bn) emerged as the major net buyers. 

Outlook Market will remain edgy in the short term ahead of the outcome of the US polls and the FOMC meeting (Nov 7), alongside the start of the Nov earnings season (support: 1,566-1,583-1,589; resistance: 1,625-1,638-1648). Additionally, the outlook could be weighed down by uncertainty over the US election results and lingering Middle East turmoil. 

Technically, after retreating 12.9% from 52W high of RM0.775 (Oct 8) to RM0.675, LHI is in base building mode, with key supports at RM0.66 (50%FR) and RM0.635 (61.8% FR) cushioning downside. A successful breakout above the RM0.69 (38.2% FR) could extend upside momentum towards RM0.72 (23.6% FR) and RM0.775.

VIRTUAL PORTFOLIO We Had Squared Off MNHLDG (2.1% Return) Yesterday Due to Expiry.

Source: Hong Leong Investment Bank Research - 6 Nov 2024