Hopes for US Rate Cut Next Week to Lift Tone

Bursa Malaysia shares traded sideways on Thursday on negative market breadth, ignoring gains on Wall Street and key regional markets. The FBM KLCI slipped 1.12 points to close at 1,602.08, off an early low of 1,597.12 and high of 1,605.95, as losers beat gainers 548 to 466 on a higher turnover of 3.32bn shares worth RM2.53bn.

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

Local sentiment should be lifted ahead of the weekend, on optimism over an interest rate cut from the Federal Reserve next week after recent US inflation data fell within market expectations. 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.

Bargain Duopharma & Pharmaniaga

Duopharma should attract bargain hunters prior to recovery upside to the 50-day ma (RM1.29), with a confirmed breakout to aim for re-test of the 50%FR (RM1.34) and 61.8%FR (RM1.40), while retracement supports at the 23.6%FR (RM1.20) and RM1.15 cushion downside. Any further weakness on Pharmaniaga towards the 38.2%FR (33sen) would be attractive to bargain hunt for potential recovery towards the 61.8%FR (40sen) with next upside hurdles coming from the 76.4%FR (44sen) and 47sen ahead, while stronger support can be found at the 23.6%FR (28sen).

Asian Markets Advance on U.S Rate-Cut Optimism

Asian markets rose on Thursday after benign U.S. inflation data that supported expectations of a Federal Reserve interest rate cut this month. The US consumer price index data came in line with expectations, cementing forecasts for the Fed to cut rates by 25 basis points later in December. The report has increased confidence that the US Fed will lower interest rates by another quarter-point next week. Traders in Asia also assessed jobs data from Australia, which showed the country’s unemployment rate dropped to 3.9% in November from 4.1% the month prior. A poll of economists from Reuters had expected the rate to rise to 4.2%.

Chinese shares rose as leaders met in Beijing to set economic plans and targets for the coming year. The government announced plans to expand trial private pension programs to the entire country, beginning Dec. 15. In mainland, the Shanghai Composite gained 0.85% to 3,461.50, while Hong Kong’s Hang Seng Index jumped 1.2% to 20,397.05. In Japan, the Nikkei 225 climbed 1.21% to 39,849.14 and broad-based Topix added 0.86% to 2,773.03. South Korea’s Kospi also jumped 1.62% to 2,482.12, while Australia’s S&P/ASX 200 fell 0.28% to 8,330.30.

Wall Street Dips as Traders Digest Economic Data

Wall Street’s major indexes fell overnight, as traders evaluated key economic indicators ahead of the Federal Reserve's meeting next week. The Dow Jones Industrial Average fell 0.53% to close at 43,914.12. The S&P 500 slipped 0.54% to 6,051.25, while the Nasdaq Composite lost 0.66% to 19,902.84. Initial claims for U.S. unemployment benefits unexpectedly climbed last week, raising concerns about labour market resilience. U.S. producer prices rose more than forecast in November, though a moderation in service costs pointed to a continuation of the broader disinflationary trend. With a third-consecutive cut from the US central bank widely expected, traders’ focus is turning to the Fed’s projections for next year.

Still-elevated inflation pressures and the prospect of a pause in early-2025 have left investors on edge. In the EU, the European Central Bank met expectations for a quarter-point of interest-rate easing, while the Swiss National Bank made a surprising 50 basis-point rate reduction. Tech names were among the notable decliners, with Nvidia losing more than 1%. Software giant Adobe declined more than 13% following the company’s weaker-than-expected 2025 outlook. Meta Platforms, Alphabet and Amazon ended the session lower as well.

Source: TA Research - 13 Dec 2024