Situational Plays on Construction, Tech and Property Highlight

Blue chips eased as profit-taking persisted on Tuesday, but strong situational plays on the construction (+4.3%), technology (+2.4%) and property (+1.4%) sectors lifted the broader market. The FBM KLCI shed another 2.88 points to settle at 1,611.49, off an opening high of 1,617.37 and low of 1,609.26, but gainers led losers 797 to 496 on higher turnover of 6.98bn shares worth RM5.11bn.

Resistance at 1,632/1,640; Supports at 1,601/1,587

As key blue chips extend range bound trade, robust situational plays in the construction, technology and property sectors should continue to highlight trading interest. Immediate index resistance remains the recent high of 1,632, with 1,640, 1,660 and then 1,680 as tougher upside hurdles. Immediate supports are at 1,601, the rising 30-day moving average, with 1,587 and 1,557, the respective 50-day and 100-day moving averages, acting as stronger supports.

Bargain SKP Resources & VSI

SKP Resources will need breakout confirmation above the 38.2%FR (RM1.32) to boost upside momentum and target the 23.6%FR (RM1.47) and RM1.60 ahead, with uptrend supports from the rising 30-day ma (RM1.10) and 50-day ma (RM1.02) cushioning downside. VSI need to overcome the 123.6%FP (RM1.20) to aim for the 138.2%FP (RM1.26) and 150%FP (RM1.31) going forward, and the 30-day ma (RM1.00) and 50-day ma (RM95sen) capping downside risk.

Asian Markets Mixed on Europe Uncertainty

Asian markets closed mixed on Tuesday, as traders pondered fresh political uncertainty in European markets and awaits fresh economic data from the region this week. The euro and government debt had been shaken after investors assessed whether the right wing can repeat their success in French elections and how much sway far-right parties can have on the new European Union executive. Bond yields rose across Europe, with the spread between French and German debt widening notably, after an opinion poll suggested the far-right National Rally could win the snap election, albeit without a clear majority.

Traders seemed reluctant to make significant moves ahead of several key events later this week, including China and India’s inflation numbers for May, while the Bank of Japan’s rate decision will come on Friday. Australia’s ASX 200 dropped 1.33% to 7,755.40, and South Korea’s Kospi gained 0.15% to 2,705.32. In Japan, the Nikkei 225 gained 0.25% to 39,134.79, while the broad-based Topix fell 0.20% to 2,776.80. In Hong Kong, the Hang Seng index fell 1.04% to 18,176.34, and the Shanghai Composite Index lost 0.76% to 3,028.05.

Wall Street Mixed Ahead of Fed Policy Meeting

Wall Street’s main indexes ended mixed overnight as traders turned cautious ahead of the U.S. Federal Reserve's policy meeting and inflation data. The Dow Jones Industrial Average lost 0.31% to close at 38,747.42. The S&P 500 gained 0.27% to finish the session at 5,375.32, and the Nasdaq Composite rose 0.88% to 17,343.55. The Federal Reserve began its two-day policy meeting on Tuesday. It will conclude on late Wednesday with an interest rate policy decision and a subsequent press conference featuring Fed Chair Jerome Powell. Although some indicators show signs of a slowing economy, traders will still watch out for hints on when a shift to cuts will come, with September or November in the frame.

The data-reliant Fed will watch the CPI data due early Wednesday, which is expected to show inflation remains on its meandering path down to the central bank's 2% annual target. The advance by the tech-heavy Nasdaq was partly due to a surge by shares of Apple, with the tech giant surging by 7.3% to a record after unveiling new AI features that may drive users to upgrade their devices. Microsoft also climbed, booking its first record close since May 22. Information technology was one of only two S&P 500 sectors in the green. Banking stocks moved sharply lower, dragging the KBW Bank Index down by 2% to its lowest closing level in nearly two months.

Source: TA Research - 12 Jun 2024