Blue chips rose on Tuesday, led by utility, banking and oil & gas heavyweights, lifted by the firmer regional tone on China’s measures to stimulate the domestic stock market and economy. The FBM KLCI gained 10.38 points to close at 1,454.44, off an early low of 1,441.52 and high of 1,455.8, as gainers edged losers 535 to 504 on total trade of 4.02bn shares worth RM2.85bn.

Resistance at 1,464/1,470; Support at 1,433/1,420;

Pending stronger leads or policy announcements on key infrastructure projects to sustain the strong run-up in the property and construction sectors, stocks should consolidate ahead of the Merdeka Day break, as investor attention may turn towards the key monthly U.S. jobs data to be released at the end of this week. Immediate index resistance remains at the recent 1,464 high and 1,470, with next hurdle from the 1,490/1,500 level, while immediate support stays at the recent low of 1,433, then 1420/1,400.

Bargain Axiata & CelcomDigi

Axiata will need to climb above the 23.6%FR (RM2.64) convincingly to aim for stronger resistance from the 200-day ma (RM2.86), with next hurdle at the 50%FR (RM3.08), while RM2.40 and the 13/10/22 low (RM2.24) cushions downside. CelcomDigi need to decisively overcome the upper Bollinger band (RM4.49) to target the 138.2%FP (RM4.58), 150%FP (RM4.72) and 161.8%FP (RM4.85) ahead, with uptrend support from the 200-day ma (RM4.17) cushioning downside.

Asian Stocks Rose as China Market Measures Lift Sentiment

Asian shares rose on Tuesday with sentiment supported by China's efforts to shore up its battered markets and lift market confidence. Beijing at the weekend introduced a slew of measures to shore up the market, such as halving stock trading stamp duty, loosening margin loan rules and putting the brakes on new listings. This has offered some respite to equity markets, rattled this month by fresh strain in China's property market as well as renewed selling in the U.S. Treasury market. Ten-year U.S. Treasury yields are up 23 basis points this month and set for their biggest monthly jump since February as investors positioned for a higher for longer rates scenario. Speaking at last week's Federal Reserve annual symposium at Jackson Hole, Fed chief Jerome Powell said the U.S. central bank may need to raise interest rates further to ensure inflation is contained.

Hong Kong’s Hang Seng index climbed about 2%, while on mainland China, the CSI 300 advanced 1% and ended at 3,790.11. Notably, the Shenzhen Component finished the day 2.17% up at 10,454.98, powered by tech stocks. Japan’s Nikkei 225 climbed 0.18% after leading gains in Asia on Monday, closing at 32,226.97, while the Topix was up 0.16% to end at 2,303.41. The country’s unemployment rate for July also came in higher than expected, at 2.7% compared with the 2.5% expected in a Reuters poll. Australia’s S&P/ASX 200 rose 0.71% to finish at 7,210.5, while South Korea’s Kospi gained 0.34% to close at 2,552.16.

Wall Street Ends Higher as Jobs Data Fuels Rate Hopes

Wall Street shares ended sharply higher overnight, lifted by Tesla, Nvidia and other megacap growth stocks after a drop in monthly job openings cemented expectations of a pause in interest rate hikes by the U.S. Federal Reserve. The sharp gains came after the Labor Department's Job Openings and Labor Turnover Survey showed the number of job openings stood at 8.827 million in July, falling for the third straight month and signalling easing labour market pressures. Investors also parsed a report from the Conference Board showing consumer confidence in the United States fell to 106.1 in August, compared with expectations of 116. Interest rate futures signalled an 87% chance the Fed will keep rates steady at its September meeting and a 54% chance it will keep rates on hold through November.

The S&P 500 logged its strongest one-day gain since June 2, while the Nasdaq notched its strongest session since July 28, and both indexes closed at more than two-week highs. The decline in yields supported growth stocks, with Nvidia climbing 4.2% to close at its highest ever. Tesla rallied 7.7%, even after documents showed a U.S. regulator sent a special order to the electric vehicle maker asking questions about changes to the driver monitoring system for its Autopilot software. Alphabet received a 2.7% boost from a swath of fresh artificialintelligence technology and partnerships unveiled by the Google-parent. The S&P 500 climbed 1.45% to end the session at 4,497.63 points. The Nasdaq gained 1.74% to 13,943.76 points, while Dow Jones Industrial Average rose 0.85% to 34,852.67 points.

Source: TA Research - 30 Aug 2023