Choppy Trade Amid U.S. Policy Changes

Bursa Malaysia shares extended gains for a third straight session on Tuesday, on optimism new U.S. President Donald Trump may adopt a more measured tariff policy after he refrained from imposing new tariffs on China in his inauguration speech. The FBM KLCI rose 8.12 points to settle at 1,580.46, off an early low of 1,570.97 and high of 1,582.32, as gainers led losers 665 to 372 on higher turnover of 3.43bn shares worth RM2.61bn.

Resistance at 1,605/1,630; Support at 1,550/1,529

The local market is expected to be stuck in choppy trade near term as investors respond to upcoming policy announcements and executive orders by the new Trump administration. Immediate index support remains at 1,550, with stronger supports at the 6/8/24 low of 1,529 and 1,500 psychological level. Immediate resistance is revised upwards to 1,605, with next upside hurdles at 1,630, followed by 1648.

Bargain Gadang & MRCB

Gadang looks attractive to bargain on dips for recovery to the 38.2%FR (37sen), with a confirmed breakout to target the 50%FR (40sen) and 61.8%FR (43sen) ahead, while key supports at the lower Bollinger band (31sen) and the 26/05/23 pivot low (28sen) limit downside risk. MRCB looks attractive to bargain for rebound upside towards the 61.8%FR (56sen), with a sustained breakout to aim for the 76.4%FR (63sen) and 69sen going forward. Crucial support capping downside is from the 38.2%FR (46sen) and the 23.6%FR (39sen).

Asian Markets Mixed on Trump Policy Uncertainty

Asian markets were mixed on Tuesday as investors braced for major policy changes in the U.S. following the inauguration of President Donald Trump. The new U.S. president held off from imposing new tariffs on his first day in office as previously mentioned signaling a more considered approach which offered some lift to regional markets. However, the imposition of import tariffs is expected to remain firmly on the agenda after reports that U.S. federal agencies were directed to assess their trade relations with China and neighboring countries. Meanwhile, crude oil prices fell for a third straight day as traders await details on Trump's declaration of a national energy emergency in the U.S. and promised to fill up its strategic reserves.

On economic news, South Korea’s producer price index climbed 1.7% year-on-year in December, its fastest pace since July 2024. Australia’s S&P/ASX 200 added 0.66% to 8,402.40 while in South Korea the blue-chip Kospi lost 0.08% to close at 2,518.03. Hong Kong’s Hang Seng index jumped 0.91% to 20,106.55 but the Shanghai Composite was relatively unchanged at 3,242.62. In Japan, the Nikkei 225 rose 0.32% to 39,027.98 with the Topix also rising 2.23% to end at 2,713.50.

Wall Street Advances as Tariff Threat Eases

Wall Street’s main indexes closed higher overnight as President Donald Trump struck a better-than-feared tone on global trade and speculation grew that his policies will further boost Corporate America. The Dow Jones Industrial Average gained 1.24%, to finish at 44,025.81. The S&P 500 added 0.88% to end at 6,049.24, while the Nasdaq Composite rose 0.64% to 19,756.78. Trump did not lay out any concrete plans on the universal tariffs and additional surcharges on close trade partners as previously promised, but said he was thinking about imposing duties on Canadian and Mexican goods as early as Feb. 1. Trump also said he wasn’t ready for universal tariffs yet and he was vague when discussing levies on China.

Optimism about some interest rate cuts by the Federal Reserve this year, and a drop in Treasury yields are also contributing to market's upside. Adding to the interest rate optimism, Federal Reserve Governor Christopher Waller told CNBC the central bank could lower interest rates multiple times this year if inflation eases as he is expecting. 3M climbed about 4% after earnings came in better than analysts expected. Several big technology stocks also took a leg up, with Amazon, Nvidia and Alphabet each gaining more than 1%. But a drop of nearly 4% in Apple on the back of two Wall Street downgrades restricted gains for the techheavy Nasdaq.

Source: TA Research - 22 Jan 2025