On Hold Pending US Inflation Data

Stocks traded sideways on Tuesday, as investors await more clues from economic data in the region on the immediate inflation trend. The FBM KLCI ended up 0.88 points at 1,538.42, off an early low of 1,532.07 and high of 1,540.51, as gainers led losers 570 to 472 on muted trade totalling 3.83bn shares worth RM3.04bn.

Supports at 1,525/1,502; Resistance at 1,599/1,580

The local market should stay on hold pending fresh leads, with trading likely to slow ahead of a local religious market and Good Friday holidays, and while investors await the closely watched US inflation index on Friday. Stronger index supports cushioning downside will be at

1,525 and 1,502, the respective rising 50-day and 100-day moving averages, with better support seen at 1,480. 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 MRCB & UEM Sunrise

MRCB need a confirmed breakout above the 176.4%FP (69sen) to extend rally towards the 200%FP (74sen), with next resistance at the 223.6%FP (79sen), and key uptrend supports at the rising 50-day ma (59sen) and 100-day ma (52sen). UEM Sunrise will need to overcome the

138.2%FP (RM1.21) to sustain uptrend and target the 150%FP (RM1.30) and 161.8%FP (RM1.38) ahead, while key chart supports from the rising 50-day ma (RM1.03) and 100-day ma (92sen) cushion downside risk.

Most Asian Markets Rose as Investors Digest Data

Most Asian markets rose Tuesday, with South Korea’s benchmark Kospi hitting two-year highs as investors digested a fresh batch of economic data. Mixed messages from U.S. monetary policymakers and a wobble in the Chinese yuan left traders unsettled and tentative with Friday's release of U.S. inflation data hanging over the outlook. The risk of Japan intervening to prevent further falls in the yen squeezed the dollar, however it rose against the yuan on speculation that China may tolerate a weaker currency. Japan’s service producer price index for February came in at 2.1%. The Nikkei 225 closed flat at 40,398.03, while the broader Topix ended 0.11% higher at 2,780.80.

Singapore’s manufacturing output increased 14.2% in February from January. January saw a 6.7% decline in manufacturing. The country’s Straits Times index rose 1.31%. South Korea’s Kospi was up 0.71% at 2,757.09, after hitting its highest level since February 2022 earlier in the day. The smaller-cap Kosdaq closed 0.26% higher at 916.09, touching its highest level since September. In Australia, the S&P/ASX 200 fell 0.41% to end at 7,780.20, after coming close to its all-time high on Monday. Hong Kong’s Hang Seng index climbed 0.9%, powered by energy and industrial stocks, while the mainland Chinese CSI 300 rose 0.51% to 3,543.75.

Wall Street Ends Lower Ahead of Inflation Data

Wall Street’s main indexes fell overnight as markets took a breather from a record-setting run ahead of inflation data. The Dow Jones Industrial Average inched down by 0.08% to settle at 39,282.33. The S&P slid 0.28% to close at 5,203.58, while the Nasdaq Composite lost 0.42%, finishing at 16,315.70. The Commerce Department released a report this morning showing a notable increase in new orders for U.S. manufactured durable goods in the month of February. Meanwhile, the Conference Board released a separate report showing a slight deterioration in U.S. consumer confidence in the month of March. All of the data this week serve as appetizers for the main event on Friday, when the government will release the Personal Consumption Expenditures Price Index, otherwise known as PCE.

That contains the Federal Reserve's preferred look at the pace of inflation, in the form of "core" PCE growth. The report will be released on the Good Friday holiday despite it being a market holiday. A pullback by the price of crude oil also weighed on energy stocks, with the Philadelphia Oil Service and the NYSE Arca Oil Index falling by 1.2% and 1.1%, respectively. Oil prices slip as traders assessed the impact of the wars in Eastern Europe and the Middle East on the supply picture.

Source: TA Research - 27 Mar 2024