Rebound on US Fed Cue for 3 Rate Cuts by End 2024

The local blue-chip benchmark fell on Wednesday, with banking heavyweights leading losses on worries the US Federal Reserve may opt to keep interest rates at current levels longer to contain inflation. The FBM KLCI slid another 9.17 points to end near session lows at 1,535.79, off an opening high of 1,546, as gainers matched losers 509 to 509 on slower trade totalling 3.81bn shares worth RM2.65bn.

Resistance at 1,559/1,580; Stronger Supports at 1,523/1,499

Stocks should bounce back following the Wall Street overnight rally to records as the US central bank cued for 3 interest rate cuts before the end of this year. Immediate index 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. Stronger supports cushioning downside are at 1,523 and 1,499, the respective rising 50-day and 100-day moving averages.

Bargain Genting Berhad & GENM

Genting Berhad need confirmed breakout above the RM5.10 recent high to extend recovery towards RM5.40, with next hurdles at the 123.6%FP (RM5.60) and 138.2%FP (RM5.95) ahead, while the rising 100-day ma (RM4.56) provide uptrend support. Genting Malaysia will require decisive breakout above the 19/3/21 high (RM2.87) to fuel uptrend momentum towards RM3.00, with tougher hurdles at 123.6%FP (RM3.15) and 138.2%FP (RM3.33) going forward, while uptrend support also come from the rising 100-day ma (RM2.62).

Asian Markets Rise Ahead of Fed Decision

Asian markets rose on Wednesday as investors digested the Bank of Japan’s landmark shift in monetary policy while awaiting the U.S. Federal Reserve’s interest rate decision. The BOJ on Tuesday raised interest rates for the first time in 17 years and scrapped its yield curve control policy, sending the Nikkei beyond the 40,000 mark for the first time in almost two weeks. The People’s Bank of China kept its one- and five-year loan prime rates unchanged at 3.45% and 3.95%, respectively. The one-year LPR acts as the peg for most household and corporate loans, while the five-year LPR is the benchmark for most property mortgages.

Hong Kong’s Hang Seng index ended nearly unchanged, while the mainland Chinese CSI 300 rose about 0.22% to close at 3,585.38. In Australia, the S&P/ASX 200 fell 0.1% to close at 7,695.8, a day after the country’s central bank held rates at 4.35% for the third meeting in a row. South Korea’s Kospi climbed 1.28% to 2,690.14, powered by a 5.63% gain in heavyweight Samsung Electronics. This is Samsung’s best day since Sep. 1, 2023. Separately, the small-cap Kosdaq inched 0.05% lower to 891.45. Japan’s Nikkei 225 is closed for a public holiday.

Wall Street Rally to Records After Fed Cues 3 Rate Cuts by End 2024

The three major US stock market averages rallied to all-time closing records overnight after the Federal Reserve held interest rates at a 23-year high and maintained expectations for three cuts before the end of 2024. The Dow Jones Industrial Average rallied 401.37 points, or 1.03%, to finish at 39,512.13, while the S&P 500 gained 0.89% to close at 5,224.62 and punched above the 5,200 level for the first time ever. The Nasdaq Composite jumped 1.25% to settle at 16,369.41. The Fed left rates unchanged but said that it plans to cut three times before the end of the year, reaffirming its previous forecast from December. That said, the central bank indicated that it needs greater evidence that inflation is easing before it starts taking its foot off the brakes.

Financial stocks were higher after the Fed decision on the hope that rate cuts this year will keep the economy growing. American Express added 2.8%, while the SPDR S&P Regional Banking ETF gained more than 3%. Megacap technology stocks responsible for powering the recent market rally rose as investors bet the sector stands to gain the most from lower rates. Alphabet, Amazon, Microsoft and Nvidia rose about 1%, while Meta Platforms gained 1.9%. Recent market laggards Apple and Tesla advanced 1.5% and 2.5%, respectively.

Source: TA Research - 21 Mar 2024