Cautious as Investors Digest Corporate Earnings

Bursa Malaysia shares rebounded on Monday following bargain hunting interest in industrial products, construction and plantation stocks. The FBM KLCI climbed 11.6 points to close at 1,604.04, off an early low of 1,591.49 and high of 1,605.41, but losers edged gainers 529 to 484 on total turnover of 2.96bn shares worth RM2.23bn.

Support at 1,588/1,565; Resistance at 1,630/1,648

Local market sentiment should remain cautious as investors digest the current corporate earnings and price-in bets for slower interest rate cuts going forward by the US Federal Reserve. Immediate index support rests at 1,588, the 38.2%FR of the 1,529 low (6 Aug) to 1,684 high (29 Aug) rally, with stronger key supports at 1,565, the 23.6%FR level, and then 1,550. Immediate resistance will be at 1,630, next 1,648, the 76.4%FR level, followed by the September peak of 1,675.

Bargain Axiata & CelcomDigi

Axiata will need convincing breakout above the 38.2%FR (RM2.42) to boost upside momentum and aim for the 50%FR (RM2.53) and 61.8%FR (RM2.64) going forward, while key support from the lower Bollinger band (RM2.17) and 31/10/23 low (RM2.08) limit downside risk. CelcomDigi will need sustained strength above the 38.2%FR (RM3.51) for upward momentum to challenge the 50%FR (RM3.68), with a confirmed breakout to aim for the 61.8%FR (RM3.85) ahead, while the lower Bollinger band (RM3.21) and 13/10/22 low (RM2.99) cushions downside.

Asian Markets Mixed Ahead of Key Economic Data

Stocks in Asia were mixed on Monday as traders looked ahead to key economic data to be released this week from the region. Key data this week from Asia will include China’s loan prime rate, set to be released Wednesday. No change is expected in China’s LPR, with the one-year rate currently at 3.1% and the five-year LPR at 3.6%. Japan will release trade data on Tuesday and October headline inflation numbers on Friday, while Australia’s central bank on Tuesday will release minutes of its meeting earlier this month. Elsewhere this week, UK and eurozone inflation readings are due which will help gauge the outlook for Bank of England and European Central Bank policy with a swath of officials from the respective institutions also due to speak.

Meanwhile, Bank of Japan Governor Kazuo Ueda reiterated on Monday the central bank will keep raising interest rates if economic and price developments move in line with its forecasts but made no mention of whether a hike could come in December. South Korea’s Kospi jumped more than 2% to 2,469.07, while Australia’s S&P/ASX 200 added 0.18% to 8,300.20. Japan’s Nikkei 225 fell 1.09% to 38,220.85 and the Topix lost 0.73% to 2,691.76. The Shanghai Composite Index fell 0.22% to 3,323.55, while Hong Kong’s Hang Seng Index gained 0.77% to 19,576.61.

Nasdaq, S&P 500 Ends Higher as Tesla Jumps

The Nasdaq and S&P 500 edged higher in choppy trading overnight, as Tesla shares surged, and traders looked ahead to Nvidia earnings to test the health of the AI trade. The Dow Jones Industrial Average fell 0.13% to close at 43,389.60. The S&P 500 gained 0.39% to 5,893.62, while the Nasdaq Composite rose 0.60% to 18,791.81. Shares in Elon Musk’s electric-car maker jumped 5.6% on a news report Trump’s transition team has told advisers they plan to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities. Elsewhere, Apple and Netflix rose 1.3% and 2.8%, respectively, while Advanced Micro Devices surged 3%.

Meanwhile, Nvidia Corp. is back in the spotlight this week as the chip maker prepares to report its quarterly earnings on Wednesday and could serve as the next major catalyst as traders search for signs of resilient demand for its Blackwell AI chips. Beyond Nvidia, traders also await a batch of earnings from key retailers, which could offer greater insight into the health of the economy and consumer spending. Walmart, Lowe’s and Deere are also on deck this week.

Source: TA Research - 19 Nov 2024