Sideways Pending Clearer Market Leads

Bursa Malaysia shares stayed range bound for the first trading day of the year, as investors braced for upcoming economic data from the region for more leads on the likely trend for easing monetary policy. The FBM KLCI eased 1.56 points to close at 1,453.10, after moving between early low of 1,446.36 and high of 1,453.56, as gainers led losers 512 to 463 on robust turnover of 4.91bn shares worth RM2.00bn.

Supports at 1,450/1,440; Resistance at 1,470/1,490

Stocks are likely to continue trading sideways pending more concrete domestic and regional leads for guidance on a clearer near-term market direction. It will be crucial that the 1,450 immediate support hold to prevent further correction potential towards better supports at 1,440 and 1,430, while 1,400/1,390 should act as stronger support. Immediate resistance remains at 1,470, while a confirmed breakout will encourage further gain towards the 1,490/1,500 level.

Bargain MRCB & UEM Sunrise

MRCB need to overcome the upper Bollinger band (46sen) to fuel upside momentum towards the 123.6%FP (48sen) and 138.2%FP (51sen) ahead, while key retracement support at the 76.4%FR (40sen) cushions downside risk. UEM Sunrise will need convincing breakout above the 123.6%FP (89sen) to enhance further upside momentum and aim for the 138.2%FP (97sen) and 150%FP (RM1.03) going forward, with the 100-day ma (76sen) acting as key uptrend support.

Asian Markets Mixed as Traders Digest Economic Data

Asian markets were mixed in muted trading on the first trading day of the year, as traders digested a range of key economic releases across the region. Market focus now turns to a slew of data due this week which will give further clarity on how much room there is for major central banks globally to ease monetary policy, and how soon those rate cuts could come. In Asia, a private-sector survey on Tuesday showed China's factory activity expanded at a quicker pace in December due to stronger gains in output and new orders, but business confidence for 2024 remained subdued. That contrasted with official data released over the weekend, which showed China's manufacturing activity shrank for a third straight month in December.

Separately, Singapore's economy grew 2.8% in the fourth quarter year-on-year, faster than some economists expected and helped by improvements in construction and manufacturing. Flash euro zone inflation figures are due on Friday, alongside the closely-watched U.S. nonfarm payrolls report. Australia’s S&P/ASX 200 rose 0.49% to close at 7,627.80, just about 1 point away from its all-time high of 7,628.9 hit on Aug. 13, 2021. South Korea’s Kospi rose 0.65% to 2,672.46, and the small-cap Kosdaq added 1.27% to 877.61. In China, the Shanghai composite index fell 0.43% to 2,962.28, while Japan markets were closed for a holiday.

S&P 500, Nasdaq Fall as Tech Bulls Lose Their Grip

The S&P 500 and Nasdaq fell in the first trading session of 2024 as the tech sector giants dubbed the Magnificent Seven slumped. The Dow Jones Industrial Average inched higher by 0.07% to 37,715.04. The S&P fell 0.57% to 4,742.83, while the Nasdaq Composite dropped 1.63% to 14,765.94. The weakness in the broader markets comes as some traders continue to cash in on recent strength, particularly among technology stocks. Apple shares led the pullback after Barclays downgraded the member of the Magnificent 7 market leader’s basket to an underweight rating. Other mega-cap stocks, including Nvidia, Meta Platforms and Microsoft shed between 1.8% and 3%. On the other hand, the Dow’s losses were contained as defensive stocks like Johnson & Johnson and Merck strengthened.

Equities also came under pressure as U.S. Treasury yields climbed. The yield on 10-year notes ticked above 4.00% to a two-week high before easing to 3.95%. Economic updates this week could also put the rally to the test, with the December jobs report due Friday watched for its potential to sway the Federal Reserve's thinking. Investors' bets that interest rate cuts will come fast and deep in 2024 have buoyed stocks. Information technology led declines with a 2.8% drop. Health stocks were among the best performing of the S&P 500 sectors, rising 1.7% to the index's highest level in a year.

Source: TA Research - 3 Jan 2024