Upbeat on China Monetary Policy Plan

Stocks ended higher on Wednesday, mirroring optimism from US and key regional markets following the U.S. presidential election results, with keen bargain hunting interest seen in the technology, construction and health care sectors. The FBM KLCI climbed up 13.47 points to settle at the day’s high of 1,634.17, off an early low of 1,623.52, as gainers swarmed losers 849 to 352 on higher turnover of 3.4bn shares worth RM2.92bn.

Resistance at 1,648/1,660; Support at 1,600/1,593

The local market should remain upbeat, lifted by China’s central bank plans to increase intensity of counter-cyclical monetary policy to address short-term economic challenges. Immediate index resistance is revised to the recent high of 1,648, with next upside hurdles seen 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 1,593, and next at 1,575, the 76.4%FR level.

Bargain Supermax & Top Glove

Supermax would need to overcome resistance at RM1.00 to enhance recovery upside towards RM1.09 and RM1.20 ahead, while stronger retracement support is found at the lower Bollinger band (80sen) followed by 75sen. Top Glove needs convincing breakout above RM1.20 to target RM1.30 and RM1.40 before profit-taking cap upside, while the 200-day moving average (98sen) and 90sen act as important chart supports.

Asian Markets Mixed as Traders Digest US Election Outcome

Asian markets traded mixed Wednesday, as traders were increasingly pricing in a win for Republican Donald Trump in the U.S. presidential race against Democratic Vice President Kamala Harris. With polls closed in more than half of the states, early returns pointed to an edge for former President Trump over Vice President Kamala Harris. Meanwhile, the news fueled jitters in some Asian markets, with the offshore yuan sliding along with shares in Hong Kong as traders factored in a possible increase in trade tensions. Traders now turn their attention to the Federal Reserve’s two-day policy meeting that begins on Wednesday.

On economic news, Japan's service activity contracted in October on weaker sales, with business confidence slipping to the lowest level since March 2022 on concerns over shortage of labor, a private survey showed on Wednesday. Japan’s Nikkei 225 led gains, rising 2.61% to end at 39,480.67 and the Topix rose 1.94% to reach 2,715.92. Australia’s S&P/ASX 200 rose 0.83% to 8,199.50 and South Korea’s fell 0.52% to 2,563.41. In Hong Kong, the Hang Seng Index dropped 2.23% to 20,538.38, while the Shanghai Composite Index closed nearly unchanged at 3,383.81.

Wall Street Soars on Trump Victory

Wall Street's major indexes marched to record highs overnight, with traders mapping out Donald Trump’s return to the White House and what his policies will mean for markets. The Dow Jones Industrial Average surged 3.57% to close at 43,729.93. The S&P 500 gained 2.53% to 5,929.04, while the Nasdaq Composite jumped 2.95% to 18,983.47. The extended rally on Wall Street comes as traders bets the newly elected president will enact pro-growth policies that will boost Corporate America. A Trump administration is also expected to scale back government regulations and be less hostile to mergers and acquisitions. However, Trump has also called for increased tariffs on China and other countries, which could lead to renewed inflation concerns.

With the elections now largely in the rearview mirror, traders will turn their attention to the Federal Reserve, which is due to announce its latest monetary policy decision late Thursday. The Fed is widely expected to lower interest rates by 25 basis points, but the accompanying statement could impact the outlook for future rate cuts. Shares in electric car maker Tesla, whose CEO Elon Musk is a prominent backer of Trump, saw shares surge more than 14%. Bank shares got a boost with JPMorgan Chase climbing 11.5% and Wells Fargo jumping 13%.

Source: TA Research - 7 Nov 2024