Liquidity Boost Needed to Sustain Upside

Blue chips held steady on Monday, as the year-end window dressing activities on selective key index heavyweights contributing to overall market gains, while regional markets traded mixed following declines on Wall Street last Friday. The FBM KLCI went up 9.54 points to close at 1,637.68, off an early low of 1,624.92 and high of 1,638.56, as gainers led losers 614 to 452 on total turnover of 2.55bn shares worth RM2.09bn.

Resistance at 1,648/1,675; Support at 1,620/1,600

While the positive technical momentum should lift market sentiment on the last trading day of the year, stronger buying momentum and a liquidity boost are crucial to sustain the local benchmark’s rise to higher ground. Immediate index resistance is upgraded to 1,648, followed by the September peak of 1,675 with tougher resistance seen at the 1,684 high (29 Aug). Immediate support is revised upwards to 1,620, with better supports at 1,600 and 1,588, which is the 38.2%FR level, with next crucial support at 1,565, the 23.6%FR level, followed by the key 1,550 support.

Bargain Gamuda & UEM Sunrise

Gamuda shares need sustained strength above the 20/12/24 high (RM4.90) to enhance upward momentum towards the 123.6%FP (RM5.48), with next resistance seen at the 138.2%FP (RM5.84) ahead, while support from the 76.4%FR (RM4.31) and 61.8%FR (RM3.95) limits downside risk. Likewise, UEM Sunrise needs to climb above the 12/04/24 high (RM1.17) convincingly to aim for the 20/05/24 peak (RM1.28) and 123.6%FP (RM1.52) going forward. Key uptrend support from 61.8%FR (88sen) and 50%FR (76sen) cushions downside.

Asian Markets Mixed as U.S Tech Losses Weigh

Stocks in Asia traded mixed on Monday after US equities declined on Friday, led by losses in technology shares. Wall Street suffered a broad-based sell-off on Friday with no obvious trigger, though volumes were just two-thirds of the daily average. While every major industry group saw losses, tech mega caps bore the brunt of the selling. That’s after a surge that has seen the so-called “Magnificent Seven” account for more than half of the US equity benchmark’s gains in 2024. Volumes were light with the New Year holiday looming and a rather bare data diary this week. China has the PMI factory surveys out on Tuesday, while the U.S. ISM survey for December is due on Friday.

In economic news, the manufacturing sector in Japan continued to contract in December, albeit at a slower pace, the latest survey from Jibun Bank revealed on Monday with a manufacturing PMI score of 49.6. Australia’s S&P/ASX 200 traded 0.32% lower to close at 8,235.00, while South Korea’s Kospi added 0.16% to 2,408.58. Japan Nikkei 225 jumped dropped 0.96% to 39,894.54 and the broad-based Topix slipped 0.65% to 2,783.52. In mainland, the Shanghai Composite gained 0.21% to 3,407.33, while the Hang Seng Index fell 0.24% to 20,041.42.

Wall Street Ends Lower on Tech Weakness

Wall Street’s main indexes fell overnight as a retreat in technology stocks extended a stretch of losses that began when the Federal Reserve cooled expectations for interest-rate cuts two weeks ago. The Dow Jones Industrial Average fell 0.97% to close at 42,573.73. The S&P 500 fell 1.07% to 5,906.94, while the Nasdaq Composite dropped 1.19% to 19,486.78. The extended pullback on Wall Street partly reflects continued weakness among technology stocks, which may be due to profit taking going into the end of the year. Large tech stocks were struggling again, with shares of Tesla losing 2.6% and Meta Platforms falling 1.1%.

A slump by shares of Boeing is also weighing on the Dow after South Korea's Transport Ministry ordered an inspection of B737-800 aircraft after the deadly Jeju Air crash over the weekend. In U.S. economic news, a report released by the National Association of Realtors showed pending home sales surged by much more than expected in the month of November. In a separate development, the New York Stock Exchange and the Nasdaq announced trading will be closed on Thursday, Jan. 9, for a day of mourning for former President Jimmy Carter.

Source: TA Research - 31 Dec 2024