Market Awaits Key US Economic Data

The local blue-chip benchmark was stuck in rangebound trade Tuesday, in line with regional markets as traders digested announcements by China’s top leaders for bolder stimulus measures next year to revive the world’s second-largest economy. The FBM KLCI shed 2.46 points to close at 1,608.97, off an early high of 1,615.93 and low of 1,607.88, but gainers edged losers 534 to 513 on moderate turnover of 2.74bn shares worth RM2.64bn.

Resistance at 1,628/1,648; Support at 1,588/1,565

The local market should remain in consolidation mode as investors await the release of US inflation and personal spending data later this week for clearer direction on the Fed’s future interest rate cuts. Immediate index resistance remains at 1,628, 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.

Sell on Rally Hartalega and Kossan

Overbought momentum indicators on Hartalega implies near-term correction potential towards the 138.2%FP (RM3.68), with the 123.6%FP (RM3.44) and RM3.25 acting as stronger supports, before stabilizing. Next significant resistance capping upside will be at the 161.8%FP (RM4.07) and 176.4%FP (RM4.31) ahead. A further rise in Kossan shares should meet stronger profit-taking resistance towards the 123.6%FP (RM3.09) followed by the 138.2%FP (RM3.33). Key support is found at the 76.4%FR (RM2.33), with stronger support at the 61.8%FR (RM2.10) and 50%FR (RM1.91).

Asian Markets Subdued as China Stimulus Pledges Fades

Asian markets struggled to maintain early upward momentum Tuesday, as traders struggled to reach a consensus view on China's broad economic stimulus promises and shift focus to China’s Central Economic Work Conference. China’s Politburo vowed to embrace a “moderately loose” strategy for monetary policy in 2025, marking its first major shift in stance since 2011. The top leaders pledged to take a “more proactive” approach on fiscal policies, stabilizing property and stock markets, while promising to “forcefully lift consumption.” Traders will now shift focus to China’s annual closed-door Central Economic Work Conference due later this week.

Traders also look ahead to the release of closely watched U.S. inflation data later in the week, which could impact the outlook for interest rates. South Korea’s benchmark Kospi jumped over 2.2% and led gains in the region, while the small-cap Kosdaq surged up 5.3%. Japan’s Nikkei 225 gained also gained 0.53% and the Topix added 0.25%. In mainland, the Shanghai Composite rose 0.59% to 3,422.66, while Hong Kong’s Hang Seng Index slipped 0.5% to 20,311.28. Australia’s S&P/ASX 200 closed 0.36% lower to finish at 8,393.00 after the Reserve Bank of Australia held its benchmark rate at 4.35% for the 10th consecutive time.

Wall Street Slips Ahead of Key Inflation Data

Wall Street’s major indexes fell overnight, with traders unwilling to make any significant bets as they await key inflation reports that could influence the Federal Reserve's interest rate decision next week. The Dow Jones Industrial Average fell 0.35% to close at 44,247.83. The S&P 500 slipped 0.30% to 6,034.91, while the Nasdaq Composite lost 0.25% to 19,687.24. Traders are now waiting on the U.S. consumer price index report, which is due Wednesday and could influence how the Federal Reserve proceeds on interest rates at its Dec. 17-18 meeting. For now, swap trading projects an 80% chance of a quarter-point Fed reduction this month.

Oracle shares slumped more than 7% after the database software company posted fiscal second quarter results that missed Wall Street’s estimates. The stock has jumped around 67% this year. Shares in Google's parent company gained about 5% as the tech giant announced a win in its effort to compete in quantum computing. Among the worst-performing semi stocks was Broadcom, which slid about 4%. Micron and Taiwan Semiconductor also each dropped more than 3%

Source: TA Research - 11 Dec 2024