Construction and Property Stocks on Rotational Play

Bargain hunting in oil & gas, transportation and plantation heavyweights lifted stocks on Thursday, as the broader market stayed range bound while awaiting key US inflation data for leads. The FBM KLCI climbed 5.62 points to end at the day’s high of 1,543.75, off an early low of 1,533.80, as gainers edged losers 513 to 478 on slightly better trade of 4.34bn shares worth RM2.76bn.

Supports at 1,532/1,519; Resistance at 1,559/1,580

Rotational interest should return to focus on construction and property related stocks ahead of the weekend, while investors await key US inflation data for clues on the timeline for interest rate cuts. Stronger index supports cushioning downside will be at 1,532, 1,519 and 1,495, the respective rising 30-day, 50-day and 100-day moving averages. Immediate resistance will be from the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level.

Bargain Ekovest & IWCity

Ekovest will need to sustain breakout above the 61.8%FR (52sen) to reinforce upside momentum and aim for the 76.4%FR (56sen) and 8/1/24 high (62sen) ahead, while key retracement support from the 23.6%FR (41sen) limits downside risk. IWCity need to strengthen breakout momentum above the 61.8%FR (83sen) to extend higher towards the 76.4%FR (91sen) and 8/1/24 peak (RM1.03), while the 100-day ma (71sen), matching the 38.2%FR level, cushions downside.

Asian Markets Range Bound Ahead of Economic Data

Asian markets traded within tight ranges on Thursday, as traders looked ahead to another inflation reading for clues on when the U.S. Federal Reserve is likely to begin cutting interest rates. Attention now turns to producer price data in the world's largest economy due later on Thursday, which feeds into the core personal consumption expenditures price index. The core PCE index is the U.S. Federal Reserve's preferred measure of inflation. Retail sales figures for February are also due later in the day and comes ahead of the Fed's policy meeting next week, where focus will be on clues as to how soon policymakers could commence their rateeasing cycle.

US data due later in the week will offer further signs on the health of the US economy and the effect of monetary policy. The report is the last major piece of economic data to be released prior to the Federal Reserve’s upcoming policy meeting, set for March 19-20. Japan’s Nikkei 225 rose 0.29% to 38,807.38 and the broad-based Topix index added 0.49% to 2,661.59. South Korea’s Kospi also rose 0.94% to 2,718.75 while the small-cap Kosdaq fell 0.27% to 887.52. In Australia, the S&P/ASX 200 slipped 0.20% to 7,713.60 and the Shanghai composite fell 0.18% to 3,083.23.

Wall Street Slips Amid Hotter Than Expected Inflation Data

Wall Street’s main indexes fell overnight after a stronger than expected reading on U.S. inflation cast doubt on the timing and magnitude of interest rate cuts from the Federal Reserve this year. The Dow Jones Industrial Average fell 0.35% to close at 38,905.66. The S&P slipped 0.29% to finish the session at 5,150.48, while the Nasdaq Composite fell 0.30% to 16,128.53. The weakness on Wall Street reflected renewed concerns about the Federal Reserve further postponing its first interest rate cut following the release of hotter-than-expected inflation data. Before the start of trading, the Labour Department released a report showing producer prices increased by 0.6%, much more than expected 0.3% in the month of February.

The hot inflation report sent bond yields higher, with the benchmark 10-year Treasury adding about 10 basis points to 4.29%. The reading served as one of the last pieces of data that could sway the Federal Reserve at its policy meeting next week. Nvidia shares fell 3.2%, while an index of semiconductors was down 1.8%. The index is down 3.5% for the week so far, with investors taking profits after recent sharp gains. The small cap benchmark Russell 2000 Index was one of the biggest laggards on the day, falling about 2% as investors scaled back bets for a June interest rate cut.

Source: TA Research - 15 Mar 2024