Overnight US Rally to Cushion Local Market

Blue chips were range bound Tuesday, but late bargain hunting interest in key banking, plantation and telco heavyweights lifted the index for a firm close. The FBM KLCI rose 4.27 points to end at the day’s high of 1,620.70, off an early low of 1,613.91, as gainers edged losers 512 to 476 on moderate turnover of 2.59bn shares worth RM2.47bn.

Resistance at 1,630/1,648; Support at 1,600/1,592

The overnight rally on Wall Street should cushion the lacklustre local market today, but the undertone remains cautious as investors refrain from trading commitments amid clueless market direction on the local front. Immediate index resistance remains at last week’s high of 1,630, then 1,648, with the next upside hurdles at 1,660 and 1,675. Immediate support stays at the 1,600 psychological level, with next crucial support coming in at the 200-day moving average level of 1,592, and next at 1,575, the 76.4%FR level.

Bargain Hartalega & Kossan

Hartalega needs breakout confirmation above the 123.6%FP (RM3.44) to boost upside momentum towards the 138.2%FP (RM3.68) and 150%FP (RM3.87), while downside risk is restricted by the 100%FP (RM3.05) and 50-day moving average (RM2.86). Meanwhile, Kossan will need to surpass the 76.4%FR (RM2.41) to fuel further upside towards RM2.60, and the 100%FP (RM2.80) ahead, with the 50-day moving average (RM1.99) and 38.2%FR (RM1.78) acting as important chart supports.

Asian Markets Mixed on U.S. Election Anxiety

Stocks in Asia traded mixed Tuesday, as traders remained cautious ahead of the closely contested U.S presidential election and the US Fed's upcoming interest rate decision later this week. The U.S presidential vote looms large for financial markets this week, as polls show Americans narrowly split between Donald Trump and Kamala Harris. The likelihood of a disputed result may drag the vote count out for weeks or even months, spurring a potential rise in volatility. Election Day will quickly be followed on Thursday by the Fed decision and Jerome Powell’s press conference, where he’ll give details on the central bank’s interest-rate path.

In China, mainland stocks turned higher after China’s service activity expanded at the fastest pace since July, and comments from the premier that the country has ample policy room. Sentiment also got a lift after the nation’s top legislative body reviewed a proposal that aims to reduce the financial burden of local officials. The Shanghai Composite Index jumped 2.32% to 3,386.99, while Hong Kong’s Hang Seng Index gained 2.14% to 21,006.97. Japan’s Nikkei 225 also jumped 1.11% to 38,474.90 and the Topix added 0.76% to 2,664.26. In Australia, the S&P/ASX 200 slid 0.40% to close at 8,131.80, while South Korea’s Kospi fell 0.47% to 2,576.88.

Wall Street Ends Sharply Higher as Traders Await Election Outcome

Wall Street's major indexes ended sharply higher overnight, as traders awaited the results from a high-stakes U.S. presidential election. The Dow Jones Industrial Average gained 1.02% to close at 42,221.88. The S&P 500 rose 1.23% to 5,782.76, while the Nasdaq Composite jumped 1.43% to 18,439.17. While traders have paid close attention to the contentious U.S. presidential race and anticipate volatility if the victor remains unknown for a prolonged time, many believe that the fundamentals fueling the stock market’s rally will remain in place whether Democrat Kamala Harris or Republican Donald Trump wins the election. Those include solid corporate earnings, a resilient economy and rate cuts from the Federal Reserve.

Many on Wall Street think such factors have a much greater influence on stock performance than the outcome of an election. Beyond the election, investors await the Federal Reserve’s November rate decision due Thursday and fresh commentary from Chair Jerome Powell on the central bank’s policy moves going forward. Shares of Nvidia rose nearly 3%, but the chipmaker and bull market stalwart would appear to be insulated regardless of the election’s outcome. Tesla rose 3.5%, though the electric car stock could be seen as benefiting from a Democratic victory or a Republican one, given CEO Elon Musk’s close ties to Trump.

Source: TA Research - 6 Nov 2024