Brief Respite from Easing Mideast Tensions

The local benchmark index gained a third day on Wednesday on positive market breadth and improved trading volume with utility and property sectors leading gains. The FBM KLCI rose 1.1 points to 1,604.25, off an early low of 1,600.83 and high of 1,609.41, as gainers led losers 590 to 480 on higher turnover of 3.19bn shares worth RM2.96bn.

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

Market sentiment may be temporarily lifted by easing tensions in the Middle East following the announcement of a ceasefire deal between Israel and the Lebanese militia, Hezbollah. Immediate index resistance remains at 1,630, next 1,648, followed by the September peak of 1,675. Immediate support stays 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.

Bargain AMMB & Public Bank

A confirmed breakout on AMMB above the 161.8%FP (RM5.45) would enhance upside momentum for share price to target the 176.4%FP (RM5.66), with the next significant hurdle being the 200%FP (RM5.99). Key uptrend supports come from the respective 50-day ma (RM5.16) and 100-day ma (RM4.95). Public Bank is currently rebuilding support near the 100%FP (RM4.32) and requires breakout from consolidation above the 138.2%FP (RM4.62) to fuel further upside towards the 150%FP (RM4.71) and 161.8%FP (RM4.80) ahead, while stronger support from the 200-day ma (RM4.25) cushions downside.

Asian Markets Diverge Ahead of U.S Inflation Data

Stocks in Asia diverged on Wednesday, as market participants await key U.S. inflation data for insights into the potential scale of a Federal Reserve rate cut next month. A slew of data from the U.S due later in the day on inflation and economic growth may provide clues as to how the Federal Reserve will respond in December. Federal Reserve officials were divided on further rate cuts at their meeting earlier this month but agreed to limit guidance on the future direction of U.S. monetary policy. On regional economic news, China’s industrial profits dropped by 10% in October from a year ago, data showed Wednesday, in another sign that Beijing’s recent stimulus measures have yet to reverse a slump in corporate earnings.

In Australia, the monthly consumer price index figure rose 2.1% in October year on year, missing the 2.3% expected by economists polled by Reuters. Meanwhile, Middle East tensions abated somewhat as President Joe Biden said Israel reached a cease-fire deal with the Lebanese militant group Hezbollah. Japan’s Nikkei 225 fell 0.80% to 38,134.97, while the broad-based Topix lost 0.90% to 2,665.34. South Korea’s Kospi also fell 0.68% to 2,503.06 and Australia’s S&P/ASX 200 rose 0.57% to end the day at 8,406.70. In mainland, the Shanghai Composite jumped 1.53% to 3,309.78, while Hong Kong’s Hang Seng Index surged 2.32% to 19,603.13.

Wall Street Fall as Traders Assess Inflation Data

Wall Street’s major indexes fell in light trading overnight as traders digested fresh data that showed inflation made little progress toward the Fed's 2% target in October. The Dow Jones Industrial Average fell 0.31% to close at 44,722.06. The S&P 500 slipped 0.38% to 5,998.74, while the Nasdaq Composite lost 0.60% to 19,060.48. The weakness in the broader markets comes after the latest reading of the Federal Reserve's preferred inflation gauge showed price increases were flat in October from the prior month, raising questions over whether progress in getting to the central bank's 2% goal has stalled.

The mood is muted in the wind-down to the Thanksgiving holiday, which will see markets shut on Thursday and close early on Friday. Traders also appeared to take profits on big technology names that have largely performed well this year, which can explain the Nasdaq’s underperformance. Nvidia, which has surged more than 168% in 2024, lost almost 1.6% in the session. Meta Platforms slid nearly 1% after rallying around 60% this year. Elsewhere in tech, Dell and HP both dropped more than 11% after providing weak earnings guidance.

Source: TA Research - 28 Nov 2024