Upbeat on Further Rate Cuts by Global Central Bankers

Bursa Malaysia shares slipped into profit-taking consolidation on Monday, with traders taking some profits on recent strong gains in construction and property counters linked to the JohorSingapore Special Economic Zone following the tax incentives introduced to support growth. The FBM KLCI shed 3.52 points to close at 1,665.30, off an early high of 1,671.62 and low of 1,658.48, as losers beat gainers 675 to 458 on total turnover of 3.36bn shares worth RM3.17bn.

Key Resistance at 1,674/1,684; Supports at 1,650/1,633

Stocks should remain upbeat amid hopes for further rate cuts from key global central bankers, which would encourage more foreign fund flows into the region. Immediate index resistance will be at the recent high of 1,674, followed by the high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels. Immediate support will be at 1,650, then the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports.

Bargain Gadang & Hiap Teck

Gadang need to increase breakout momentum above the 38.2%FR (37sen) to enhance upside potential towards the 50%FR (40sen) and 61.8%FR (43sen) ahead, with the lower Bollinger band (32sen) expected to cushion downside. Hiap Teck will need sustained strength above the 61.8%FR (39sen) to fuel further upside momentum towards the 76.4%FR (43sen) and 47sen going forward, while the lower Bollinger band (29sen) should be able to cap downside risk.

Asian Markets Mostly Higher Ahead of Central Bank Meetings

Asian markets mostly rose on Monday as traders awaited central bank meetings that are widely expected to deliver more rate cuts. The Reserve Bank of Australia starts its two-day policy meeting on Monday, where central bankers will decide on the country’s monetary policy path on Tuesday. Sweden's central bank meets on Wednesday and is also expected to ease by 25 basis points, again with some chance it might go larger. The Swiss National Bank meets Thursday, and markets are fully priced for a quarter-point cut to 1.0%, with a 41% chance it will ease by 50 basis points. The focus shifted to the U.S. GDP print, key inflation figures, surveys on global manufacturing, U.S. consumer confidence and durable goods orders data due this week that could shed further light on the Fed's rate trajectory in the months ahead.

Meanwhile, China announced plans for a rare briefing on the economy by three top financial regulators just as it cut one of its short-term policy rates, fueling speculation authorities are preparing to ramp up efforts to revive growth. South Korea’s blue-chip Kospi rose 0.33% to close at 2,602.01, while the small-cap Kosdaq added 0.91% to 755.12. The Shanghai Composite gained 0.44% to 2,748.92, but Hong Kong’s Hang Seng index ended 0.06% lower at 18,274.11. In Australia, the S&P/ASX 200 fell 0.69% to close at 8,152.90, while markets in Japan were closed Monday for a public holiday.

Wall Street Ends Higher as Rate-Cut Fever Lingers

Wall Street’s major indexes closed modestly higher overnight, as traders parsed commentary from Federal Reserve policymakers and saw scope for further easing after last week’s half a percentage point interest-rate cut. The Dow Jones Industrial Average gained 0.15% to close at 42,124.65. The S&P 500 added 0.28% to end at 5,718.57, while the Nasdaq Composite ticked up 0.14% to 17,974.27. The undertone was positive amid optimism about the outlook for the economy following the Federal Reserve's interest rate cut last week. Fed officials including Raphael Bostic, Neel Kashkari and Austan Goolsbee supported the central bank's last rate cut and voiced support for more cuts in the rest of the year.

On economic news, U.S. business activity remained steady in September, while average prices for goods and services increased at the fastest pace in six months, potentially signaling a rise in inflation in the months ahead. Among top movers, Intel rose 3.05% after a media report said Apollo offered to make an investment of as much as USD5 billion in the chipmaker. Among rate-sensitive growth stocks, Tesla jumped 4.65%, while Meta Platforms rose 0.6% after Citigroup lifted its price target on the stock. Eight of the 11 S&P 500 sectors were higher. Energy stocks led gains with a 1.31% rise, while healthcare stocks declined 0.25%.

Source: TA Research - 24 Sept 2024