Sideways to Lower on Lacking Positive Leads

Stocks extended profit-taking consolidation on Tuesday, with utility, property and construction counters leading falls amid lack of positive local catalysts. The FBM KLCI shed 4.28 points to close at 1,585.38, off an early high of 1,594.71 and low of 1,582.35, as losers trashed gainers 838 to 316 on higher turnover of 5.2bn shares worth RM3.7bn.

Stronger Supports at 1,564/1,550; Resistance at 1,622/1,632

The local market should extend trading sideways to lower, with persisting profit-taking and lacking positive leads discouraging firmer trading commitments. Stronger index supports are at 1,564, the 100-day moving average level, and 1,550, while immediate resistance is at the early June high of 1,622, with the May high of 1,632 and 1,640 as tougher upside hurdles.

Bargain Hibiscus & Velesto

Further fall on Hibiscus shares should attract bargain hunters looking for recovery upside towards the 100-day ma (RM2.57), with tougher hurdles at RM2.70 and the April high (RM2.92), and stronger supports are seen at the 61.8%FR (RM2.19) and 50%FR (RM1.96). Velesto will be attractive to bargain on weakness to next key retracement support from the 61.8%FR (22sen), for recovery upside to the 100-day ma (27sen) and 28/2/24 high (31sen) ahead.

Asian Markets Rose as Investors Assess Regional Economic Data

Asian markets rose on Tuesday, as investors assessed South Korea’s consumer sentiment index for June, as well as Japan’s service sector producer prices. The services producer price index for Japan climbed 2.5% year on year in May, compared with the 2.7% rise in April. South Korea’s consumer confidence index climbed in June to 100.9 from 98.4 in May. This comes amid growing optimism about living standards and future household income, as well as domestic economic conditions.

Japan’s Nikkei 225 closed 0.95% higher at 39,173.15 while the broad-based Topix rose 1.72%, leading gains in Asia and closing at 2,787.37 — its highest in three weeks. South Korea’s Kospi climbed 0.35% to 2,774.39 while the Taiwan Weighted Index reversed losses, advancing 0.27% to 22,875.97. Australia’s S&P/ASX 200 closed 1.36% higher at 7,838.8.

Wall Street Mostly Rose as Nvidia Rebounds

US stocks mostly rose overnight, as investors rotated away from banks and energy plays and returned to bargain big technology names. This intermarket shift led to the Dow losing almost 300 points. The broad market S&P500 added 0.39% to close at 5,469.30, while the Nasdaq advanced 1.26% and ended at 17,717.65. Both indexes ended three days of declines. The Dow Jones Industrial Average lagged, losing 299.05 points, or 0.76%, closing at 39,112.16. Nvidia shares gained about 6.7%. During the previous session, the stock dropped more than 6% to mark its biggest one-day slide since April 19, when it lost 10%. Several large-cap tech names also bounced after suffering declines on Monday. Meta Platforms and Alphabet advanced more than 2% each.

Tuesday’s action marked a reversal from the previous session. On Monday, Nvidia’s decline weighed on fellow artificial intelligence beneficiaries Super Micro Computer and Qualcomm, and the Nasdaq closed lower by more than 1% for its worst day since April. Investors are gearing up for data on the personal consumption expenditures price index on Friday, which could provide further clues on the inflation picture and when the Federal Reserve might begin cutting interest rates. They also await snap elections in France starting at the weekend and the first U.S. Presidential debate on Thursday.

Source: TA Research - 26 Jun 2024