Cautious Over US Uncertainty

Bursa Malaysia shares rebounded on Tuesday, following the formalization of the JohorSingapore Special Economic Zone (JS-SEZ) agreement resulting in key index heavyweights in the construction and technology sectors leading gains. The FBM KLCI added 4.32 points to close at 1,629.79, off an opening low of 1,624.50 and high of 1,634.27, but losers edged gainers 614 to 490 on improved trade totaling 3.91bn shares worth RM3.29bn.

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

Investors might be reluctant to make more significant bets ahead of key U.S. employment data due to be released later this week and uncertainty on whether incoming President Donald Trump will adopt a looser tariff policy. Immediate index resistance remains at 1,648, followed by the September peak of 1,675 with tougher resistance seen at the 1,684 high (29 Aug). Immediate support is retained at 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 Hiap Teck & SunCon

Hiap Teck needs a decisive breakout above the 61.8%FR (38sen) to extend uptrend momentum towards the 76.4%FR (43sen), with a stronger upside hurdle coming at the 11/07/24 peak (50sen). The crucial chart supports at the 38.2%FR (31sen) and the 23.6%FR (26sen) cap downside risk. SunCon will need breakout confirmation above RM5.50 to enhance potential upside and target the 123.6%FP (RM5.92) followed by the 138.2%FP (RM6.42) ahead, while downside is cushioned by the 10-day ma (RM4.74) and 76.4%FR (RM4.32).

AI Optimism Boost Asian Markets

Most Asian stocks rose on Tuesday, as chip-related stocks increased further after the Nvidia Corp. chief unveiled new products that rekindled optimism over AI demand. Nvidia’s CEO Jensen Huang took the stage during the company’s keynote, laying out his vision for everything from AI software that will power robots and self-driving cars to a new AI supercomputer that fits on your desk. Meanwhile, traders are gearing up for a potential increase in market volatility as Trump’s proposed policies threaten to worsen trade friction between the US and the rest of the world. The latest US move to blacklist Chinese firms is another reminder of rising USChina tensions that may further darken prospects for the world’s No. 2 economy.

The minutes of the Fed's last meeting due on Wednesday will offer color on their dot plot predictions, while there will be plenty of live comments with several top policymakers speaking. Japan’s benchmark Nikkei 225 jumped 1.96% to 40,076.19, while the broad-based Topix gained 1.10% to 2,786.57. Australia’s S&P/ASX 200 rose 0.33% to 8,285.10 and South Korea’s Kospi added 0.14% to 2,492.10. In mainland, the Shanghai Composite rose 0.71% to 3,229.64, while the Hang Seng Index fell 1.22% to 19,447.58.

Wall Street Tumbles on Inflation Worries

Wall Street’s main indexes fell sharply overnight after better-than-expected economic data fanned fears that inflation could remain stubbornly high this year. The Dow Jones Industrial Average fell 0.42% to close at 42,528.36. The S&P 500 lost 1.11% to 5,909.03, while the Nasdaq Composite dropped 1.89% to 19,489.68. The Labor Department report showed job openings unexpectedly increased in November, while a separate report said services sector activity accelerated in December with a measure tracking input prices surging to a near twoyear high. Signs of continued resilience in the economy have pushed back expectations on when the central bank can deliver its first interest rate reduction this year.

Bond yields, meanwhile, continued a weekslong climb that pushed the 10-year Treasury yield to its highest level since April. Traders are now betting with almost certainty that the central bank will keep interest rates unchanged later this month, according to the CME Fed Watch tool. The weakness on Wall Street also came amid a slump by shares of Nvidia, with the AI darling and market leader plunging by 6.2% after reaching a record intraday high. Shares of Tesla also tumbled by 4% after Bank of America downgraded its rating on the electric vehicle maker's stock to Neutral from Buy.

Source: TA Research - 8 Jan 2025