Cautious Ahead of Key Central Bank Decisions

The local market drifted lower on Monday, easing in line with the region as investors digest weak economic data from China and looked ahead to several major central bank decisions due this week. The FBM KLCI dropped 1.90 points to close at 1,606.85, off an early high of 1,609.43 and low of 1,603.21, as losers edged gainers 656 to 424 on lower turnover of 3.16bn shares worth RM2.45bn.

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

Market sentiment is likely to remain cautious as the upcoming interest rate decisions by major central banks and weak economic data from China should keep investors sidelined. 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 Axiata & CelcomDigi

Axiata shares need a confirmed breakout above the 50%FR (RM2.53) to aim for the 61.8%FR (RM2.64) and the 76.4%FR (RM2.77) ahead, with key uptrend support from the 23.6%FR (RM2.29) capping downside risk. Meanwhile, CelcomDigi will be attractive to accumulate on weakness for recovery upside towards the upper Bollinger band (RM3.72), with stronger upside hurdles at the 61.8%FR (RM3.81) and the 76.4%FR (RM4.01), while key retracement supports are at the 38.2%FR (RM3.48) and 23.6%FR (RM3.28).

Asian Markets Dip on China Worries

Asian markets fell on Monday after weaker-than-expected retail sales data showed the world’s second-biggest economy is still struggling to recover. Figures from China showed retail sales rose just 3.0% in November, compared to a year earlier, well below market forecasts of 4.6% and evidence of the need for much more aggressive stimulus. Industrial production was much as expected, while house prices were still falling, though at a slower pace. The latest economic data have underscored persisting deflationary pressures in the flagging economy.

The lack of a clear direction in Asian market also comes as traders readied themselves for the final full week of trading this year with a series of central bank meetings including the Fed, Bank of Japan and Bank of England. In mainland, the Shanghai Composite slipped 0.16% to 3,386.33, while Hong Kong’s Hang Seng Index dropped 0.88% to 19,795.49. Japan’s Nikkei 225 inched down by 0.03% to 39,457.49 and broad-based Topix fell 0.30% to 2,738.33. South Korea’s Kospi also fell 0.22% to 2,488.97, while Australia’s S&P/ASX 200 lost 0.56% to 8,249.50.

Nasdaq, S&P 500 Climb on Tech Boost

S&P 500 and Nasdaq rose overnight, with tech shares kicking off the week on solid footing as traders geared up for interest-rate decisions by major central banks across the globe due later this week. The Nasdaq Composite gained 1.24% to 20,173.89, while the S&P 500 added 0.38% to 6,074.08. However, the Dow Jones Industrial Average fell 0.25% to 43,717.48 its longest streak of declines since 2018. Shares of Apple, Google-parent Alphabet, electric car maker Tesla and AI-chipmaker Broadcom all rallied to fresh all-time highs. Broadcom, which topped a USD1 trillion market value for the first time last week, led Nasdaq higher with a gain of 11%. The widely expected quarter-point rate cut from the Federal Reserve on Wednesday also added fresh support and extended stocks’ outperformance.

That stands in contrast to losses in Asia and Europe after weaker-than-anticipated retail data in China. On the economic front, data showed that activity at US service providers is expanding at the fastest pace since October 2021. Meanwhile, a measure of New York state factory activity retreated by the most since last May.

Source: TA Research - 17 Dec 2024