Consolidation as Investors Await Regional Inflation Cues

Bursa Malaysia shares eased in line with softer regional markets on Monday as investors await key inflation and interest rate decisions from major regional economies. The FBM KLCI slid 5.36 points to close at 1,451.02, off an early high of 1,457.02 and low of 1,448.17, as losers beat gainers 591 to 306 on total turnover of 3.16bn shares worth RM1.87bn.

Better Support at 1,430/1,400; Resistance at 1,465/1,470

The local market should remain in sideways consolidation with most investors sidelined as they await more cues from inflation and interest rate direction from key regional economies. On the index, better chart supports are at 1,430, and then 1,400/1,390, while the end June low of 1,370 will act as crucial support. Immediate resistance is still at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle.

Bargain Axiata & CelcomDigi

Axiata will need confimed breakout above the 100-day ma (RM2.45) to enhance upside potential towards the 23.6%FR (RM2.58) and RM2.70, with tougher hurdle coming from the 38.2%FR (RM2.82), while crucial support at the 31/10/21 low (RM2.16) limits downside risk. CelcomDigi’s downside should be cushioned by recent low of RM4.06 and June low of RM3.98, while a decisive breach above the 123.6%FP (RM4.35) should aim for the 138.2%FP (RM4.51) and 150%FP (RM4.65) ahead.

Asia Mixed as Gold Hit All-Time Highs Above USD2,100

Asian shares turned mixed on Monday while gold spiked to all-time highs above USD2,100 at the start of a busy week for economic data that will test market wagers for early and aggressive rate cuts from major central banks next year. Inflation readings for Tokyo will be released Tuesday, which is widely seen as a leading indicator for nationwide trends. South Korea inflation numbers will also be out the same day. The Reserve Bank of Australia will hold its final meeting for the year tomorrow, with economists polled by Reuters expecting the bank to hold rates at 4.35%.

Hong Kong’s Hang Seng index fell 1.1% after making earlier gains, while the mainland Chinese CSI 300 index slipped 0.65% to hit its lowest since February 2019. In Australia, the S&P/ASX 200 rose 0.73% and closed at 7,124.7, leading gains among major benchmarks in Asia-Pacific and hitting its highest level since Sept. 20. South Korea’s Kospi rose 0.4% to end at 2,514.95, while the small-cap Kosdaq pared earlier gains to rise 0.15%, ending at 828.52. In Japan, the Nikkei 225 slipped 0.6% to 33,321.27, while the Topix fell 0.83% to close at 2,362.65.

Wall Street Slip After 5-Week Rally as Jobs Data Eyed

US stocks slipped overnight as investors questioned whether the market was getting ahead of itself following five straight winning weeks. The Dow Jones Industrial Average shed 41.06 points, or 0.11%, to close at 36,204.44. The S&P 500 dropped 0.54% to 4,569.78. The Nasdaq Composite declined 0.84% to 14,185.49 as investors sold Big Tech shares, which have led the market’s gains this year. Monday’s moves mark a pullback following a strong period in the market. Technology shares struggled in the session. Nvidia slid 2.7%, while Microsoft and Meta each lost more than 1%. As stocks stagnated, bitcoin and gold rallied to start the week. Bitcoin passed the USD41,000 mark to notch a 19-month high, while gold reached its highest intraday level ever.

Softening economic data and recent comments from Fed officials, including Chair Jerome Powell, have heightened expectations that the U.S. central bank has ended its interest-ratehiking cycle and will begin to cut rates as soon as March. The next Fed policy meeting is scheduled to take place on Dec. 12-13. U.S. labor market data will kick off on Wednesday with the ADP National Employment Report on the private sector and culminate on Friday with the government's wider payrolls report. Data on Monday showed new orders for U.S.- made goods fell more than expected in October, marking the biggest monthly drop in roughly three and a half years. Crude prices were lower as investor skepticism over the latest OPEC+ decision on supply cuts and uncertainty surrounding global fuel demand outweighed the risk of supply disruptions from the Middle East conflict.

Source: TA Research - 5 Dec 2023