Sideways as Market Await Key Central Bank Meetings

Bursa Malaysia shares closed almost unchanged on Monday, as market undertone remained cautious while investors await key central bank policy meetings in Japan and the US. The FBM KLCI ended up 0.81 points at 1,553.64, off an early low of 1,544.32 and high of 1,557.33, as gainers led losers 546 to 480 on total turnover of 4.24bn shares worth RM2.79bn.

Resistance at 1,559/1,580; Supports at 1,534/1,521

The local market should trade sideways as investors keenly await guidance from key central bank meetings in Japan and the US for further leads. Stronger index supports cushioning downside will be at 1,534, 1,521 and 1,497, the respective rising 30-day, 50-day and 100-day moving averages. Immediate resistance remains at the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level.

Bargain Globetronics & Unisem

Globetronics will be attractive to bargain on weakness towards the key retracement support of 38.2%FR (RM1.28), for rebound upside towards the 61.8%FR (RM1.48), with tougher hurdles at the 76.4%FR (RM1.60) and 18/12/23 high (RM1.80). Unisem will need to overcome profit-taking resistance near the 76.4%FR (RM3.74) to enable further rise towards RM4.00 and the 22/11/21 high (RM4.28), while the 200-day ma (RM3.21) provide uptrend support.

Japan Led Gains Ahead of BoJ Meeting

Japan led gains in Asian markets on Monday, while China shares extended gains after data showed its economy kicked off the year on a strong note. The Reserve Bank of Australia is expected to keep its cash rate steady at 4.35% when it concludes its meeting on Tuesday. In contrast, a Reuters poll expects the Bank of Japan to exit its negative interest rate policy and lift its benchmark rate to 0% from -0.1% when it makes its announcement on Tuesday. Japan’s Nikkei 225 closed 2.67% higher at 39,740.44. Data showed retail sales and industrial production in China rose more than expected in the first two months of the year. The unemployment rate for cities was 5.3% in February.

China’s CSI 300 index closed 0.94% higher at 3,603.53, ending its sixth straight session in positive territory. Hong Kong’s Hang Seng index ended up 0.1%, after opening nearly 0.3% lower. In Australia, the S&P/ASX 200 closed 0.07% higher at 7,675.80. South Korea’s Kospi ended 0.72% higher at 2,685.84 after recording an almost 2% loss on Friday, while the smallcap Kosdaq was up 1.59% at 894.48. The Taiwan Weighted index was 1% higher ending at 19,879.85, with shares of Taiwan Semiconductor Manufacturing Company up 1.87%.

Wall Street End Higher on Tech Rebound

US stocks rose overnight as Wall Street looked to a key artificial intelligence conference and awaited new monetary policy guidance from the Federal Reserve. The Dow Jones Industrial Average climbed 75.66 points, or 0.2%, to settle at 38,790.43. The S&P 500 gained 32.33 points, or 0.63%, to finish at 5,149.42, while the Nasdaq Composite advanced 0.82% to end at 16,103.45. Nvidia shares gained 0.7% on the first day of the company’s GTC Conference — where the chipmaker is expected to showcase its latest inroads in artificial intelligence. Shares of Alphabet ended 4.6% higher after Bloomberg News reported that Apple was in talks with Google to include the company’s Gemini AI in iPhones.

Investors are also eagerly anticipating the Federal Reserve’s policy meeting this week. The two-day policy Federal Open Market Committee meeting kicks off Tuesday and ends with an announcement Wednesday. According to the CME FedWatch Tool, Fed funds futures are currently pricing in a 99% likelihood that the Fed will leave benchmark interest rates unchanged this week. However, the expectation for a June cut has ticked down in recent days to about 55%. A hotter-than-expected February core and wholesale inflation reading frustrated equities and sparked anxiety that the central bank may be partial toward higher interest rates for longer before its policy meeting begins.

Source: TA Research - 19 Mar 2024