Consolidate With Downward Bias

Bursa Malaysia shares extended sideway trading Tuesday, outpacing weaker regional markets as traders recalibrated their bets on the Federal Reserve’s easing. The FBM KLCI inched higher by 3.97 points to settle at 1,547.99, off a low of 1,540.77 and high of 1,550.99, as gainers led losers 597 to 516 on total turnover of 4.53bn shares worth RM2.82bn.

Resistance at 1,559/1,580; Support at 1,531/1,496

Persistent profit-taking and selling amid cautious external tone should damped near-term sentiment, forcing the stocks to consolidate with downward bias. Overhead resistance stays at the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level. Immediate index supports remains at 1,531 and 1,496, the respective rising 50-day and 100-day moving averages, with better support seen at 1,480.

Bargain Genting Bhd & GENM

Genting Berhad need to climb above the 11/03/24 high (RM5.10) convincingly to aim for the RM5.40 and 123.6%FP (RM5.60) going forward, while key chart support from 76.4%FR (RM4.47) cushions downside. Genting Malaysia shares need sustained strength above the upper Bollinger band (RM2.87) to enhance upward momentum towards the RM3.00, with next resistance seen at the 123.6%FP (RM3.16) ahead while the 200-day ma (RM2.53) limits downside risk.

Asian Markets Mixed as Early Rate Cut Bet Fizzle

Asian markets ended narrowly mixed Tuesday as expectations the Federal Reserve was close to cutting interest rates faded. A stronger-than-expected reading on the US manufacturing and prices paid kept sentiment in check and sparked questions about the Federal Reserve's timeline for cutting interest rates. Focus is now turning to the release of US jobs figures at the end of the week, which could have a bearing on the central bank's decisionmaking in light of a recent batch of above-par inflation readings. On economic news, South Korea’s March inflation rate held steady at 3.1%, in line with expectations from economists polled by Reuters.

Meanwhile, Australia’s factory activity in March shrank at its fastest pace since May 2020, according to a private survey from Judo Bank. The country’s purchasing managers’ index slipped to 47.3, down from February’s 47.8, and contracting for a second straight month. In Australia, the S&P/ASX 200 slipped 0.11% to 7,887.90, and the Shanghai composite fell 0.08% to 3,074.96. Japan’s Nikkei 225 inched up by 0.09% to 39,838.91, while the broad based Topix fell 0.25% to 2,714.45. South Korea’s Kospi rose 0.19% to 2,753.16, and the Hang Seng index gained 2.36% to 16,931.52.

Wall Street Slips as Manufacturing Data Lifts Yields

Wall Street’s main indexes finished lower overnight as traders digested the possibility that an interest rate cut will come later than hoped after stronger-than-expected manufacturing data pushed Treasury yields higher. The Dow Jones Industrial Average dropped 1% to settle at 39,170.24. The S&P slid 0.72% to close at 5,205.81, while the Nasdaq Composite shed 0.95% to 16,240.45. The Institute for Supply Management’s manufacturing gauge showed expansion for the first time since September 2022. Separately, the new data from the Bureau of Labor Statistics showed job openings were marginally higher in February while hiring ticked up slightly. Benchmark 10-year and two-year Treasury yields jumped to two-week peaks following the manufacturing data.

Meanwhile, Regional Fed Presidents Mary Daly of San Francisco and Loretta Mester of Cleveland said they anticipate rate cuts this year but do not expect to start easing anytime soon. Tesla slid 4.9% after publishing disappointing first-quarter deliveries. Tech giants Nvidia, Alphabet and Microsoft all ended the day lower. The majority of S&P 500 sectors were lower, with the real estate, healthcare, and utilities among the worst hit. The energy sector gained along with stronger crude oil prices.

Source: TA Research - 3 Apr 2024