Range Bound Pending Fresh Local Leads

Stocks rebounded on Tuesday, led by construction, property and oil & gas heavyweights as investors returned to bargain hunt following the previous day’s profit-taking correction. The FBM KLCI rose 7.61 points to close at 1,629.68, after moving between early low of 1,625.23 and high of 1,632.5, as gainers led losers 685 to 458 on turnover of 5.12bn shares worth RM3.59bn.

Resistance at 1,638/1,640; Supports at 1,614/1,605

The local market should stay range bound pending fresh domestic leads to provide further boost, with data centre and infrastructure plays likely persisting to highlight interest in the construction, property and logistics sectors. Immediate index resistance remains at the recent high of 1,638, with 1,640 and 1,660 as tougher upside hurdles, while immediate supports are at 1,614, 1,605 and 1,580, the respectively rising 30-day, 50-day and 100-day moving average levels.

Bargain SKP Resources & Unisem

A breakout confirmation on SKP Resources above the upper Bollinger band (RM1.30) would boost upside momentum towards the 23.6%FR (RM1.41), with next major resistance seen at the 2/2/23 high (RM1.64), while uptrend supports from the rising 50-day ma (RM1.17) and 100-day ma (RM1.03) cushion downside. Unisem need convincing breakout above the 123.6%FP (RM4.30) to extend uptrend towards the 138.2%FP (RM4.55) and 150%FP (RM4.76)

ahead, with the 100-day ma (RM3.84) and 200-day ma (RM3.52) providing strong supports.

Asian Markets Mixed as Traders Assess Biden Exit

Stocks in Asia traded mixed on Tuesday, as traders weighed President Joe Biden's decision to end his reelection bid over the weekend and turning their focus to economic data and upcoming tech earnings this week. Global traders are watching the U.S. political landscape closely after Biden dropped out of the presidential race on Sunday and endorsed Vice President Kamala Harris as the Democratic nominee. With about three months of campaigning ahead, Harris has quickly consolidated support from powerful Democrats for her nascent presidential bid and appears to have a clear path to the nomination. Awaiting traders are key economic releases later this week, with a read on second-quarter GDP on Thursday. That is followed Friday with an update on the personal consumption expenditures price index.

On regional economic front, South Korea’s producer price index in June rose 2.5% year on year, compared to a 2.3% rise in May. Separately, Singapore’s consumer price index for June rose 2.4% year on year, beating Reuters’ expectations of a 2.7% increase. Japan’s Nikkei 225 ended nearly unchanged at 39,594.39, while the Topix gained 0.21% to 2,833.39. South Korea’s Kospi rose 0.39% to 2,774.29 and Australia’s S&P/ASX added 0.50% to 7,971.10. The Shanghai Composite Index dropped 1.65% to 2,915.37, while Hong Kong’s Hang Seng also slipped 0.94% to 17,469.36.

Wall Street Finish Lower Ahead of Big Tech Earnings

Wall Street's main indexes closed slightly lower overnight, as traders awaited direction from the latest earnings from major technology behemoths for clues on whether the market will be able to extend this year’s record-breaking advance. The Dow Jones Industrial Average lost 0.14% to end at 40,358.09. The S&P 500 dipped 0.16% to close at 5,555.74, while the Nasdaq Composite inched down 0.06% to finish at 17,997.35. The choppy trading on Wall Street came as traders have been reluctant to make significant moves ahead of the release of key earnings and economic news in the coming days. On the earnings front, Google parent Alphabet and electric vehicle maker Tesla are among the companies due to release their quarterly results after the bell.

Helping subdue equity markets were disappointing earnings from household names. United Parcel Service, seen as a bellwether for the global economy, slumped after missing earnings estimates, while General Motors dropped despite a second-quarter results beat and a higher annual profit forecast. Later in the week, focus is likely to shift to a report on personal income and spending in June, which includes readings on inflation said to be preferred by the Federal Reserve. The data could have a significant impact on the outlook for interest rates, with the Fed currently widely expected to lower interest rates by a quarter point in September.

Source: TA Research - 24 Jul 2024