US-China Trade Worries Dampen Sentiment

The local market continued its upward trajectory on Wednesday lifted by bargain hunting interest in key blue-chip heavyweights in the plantation, banking and transportation sectors. The FBM KLCI added 7.34 points to close at 1,587.80, off an early low of 1,581.40 and high of 1,590.81, as gainers edged losers 512 to 505 on lower turnover of 2.97bn shares worth RM2.24bn.

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

Market sentiment could turn cautious following US President Donald Trump’s statement that his administration is considering imposing a 10% tariff on imports of Chinese-made goods as soon as February 1st. Immediate index resistance is maintained at 1,605, with next upside hurdles at 1,630, followed by 1648. Immediate support remains at 1,550, with stronger supports at the 6/8/24 low of 1,529 and 1,500 psychological level.

Bargain Tenaga & DNEX

Tenaga looks attractive to bargain for rebound upside towards the 100-day ma (RM14.20), with a confirmed breakout to aim for the 100%FP (RM14.99) and RM15.71 going forward. Crucial support from the 61.8%FR (RM12.87) and 50%FR (RM12.22) cushions downside. Any further weakness on DNEX towards the lower Bollinger band (36sen) should encourage bargain hunting for recovery upside towards the 61.8%FR (45sen), with a convincing breakout above the 50%FR (50sen) to target the 38.2%FR (54sen) ahead. Stronger support is from the low of 18/01/24 (31sen).

Asian Markets Mixed on Tariff Uncertainty

Stocks in Asia traded mixed Wednesday, as a lack of clarity on President Donald Trump's plans for tariffs kept financial markets guessing. While expectations that the new US administration will lift restrictions on businesses have supported risk sentiment, a key question on Asian trader’s minds is Trump’s action on Chinese tariffs. Having spared China from his first-day flurry of executive orders, the US president put traders on edge again by saying he is considering a 10% levy on China in retaliation for the flow of fentanyl from the country. He also vowed on duties on European imports without providing further details.

Elsewhere, expectations have been growing that the Bank of Japan will raise rates by a quarter point on Friday, supporting the yen. Australia’s S&P/ASX 200 gained 0.33% to 8,429.80, while in South Korea the blue-chip Kospi added 1.15% to close at 2,547.06. In Japan, the Nikkei 225 jumped 1.58% to 39,646.25 and the Topix gained 0.87% to 2,737.19. In mainland, the Shanghai Composite fell 0.89% to 3,213.62 while Hong Kong’s Hang Seng lost 1.63% to 19,778.77.

Wall Street Extends Rally Fueled By Big Tech

Wall Street’s major indexes extended gains overnight as technology shares rallied after President Donald Trump announced a USD500 billion private sector AI infrastructure investment project named 'Stargate', which will initially be funded by Oracle, OpenAI, SoftBank and UAE-based MGX. The Dow Jones Industrial Average added 0.3% to 44,156.73. The S&P 500 rose 0.61% to close at 6,086.37 slightly below its all-time closing high, while the Nasdaq Composite surged 1.28% to 20,009.34.

Investor sentiment on the tech sector was also lifted by a strong quarterly earnings report from Netflix which beat analyst expectations, as the streaming company surpassed 300 million paid memberships during the quarter. Bets on big tech and semiconductor stocks are expected to continue to drive the stock market spurred by optimism over President Trump’s aim to maintain the US lead in the AI space and roll-back of Biden-era safety measures.

Source: TA Research - 23 Jan 2025