Consolidation Pending Fresh Local Catalysts

Stocks entered profit-taking correction mode on Thursday, with selloffs being led by key index heavyweights in the technology and energy sectors as the recently announced USD500 billion investment to build AI infrastructure in the US reduced demand for data center projects globally. The FBM KLCI slipped 10.60 points to close at 1,577.20, off an early high of 1,586.52 and low of 1,575.67, as losers beat gainers 671 to 283 on higher turnover of 3.24bn shares worth RM2.75bn.

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

The local benchmark is expected to continue its consolidation amid a lack of domestic buying catalysts, while potential tax cuts and deregulation by the new Trump administration could encourage foreign capital outflows to the US. Immediate index resistance is maintained at 1,605, with the 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 IWCity & UEM Sunrise

Any price dips in IWCity shares should attract bargain hunters looking for a rebound upside to the 76.4%FR (60sen), with next major resistance coming from the 61.8%FR (68sen) and the 50%FR (75en) going forward. Immediate support is capped at the 100%FP (47sen) and 40sen. UEM Sunrise shares are attractive to accumulate at current depressed levels ahead of recovery to the upper Bollinger band (RM1.17), with the 20/05/24 high (RM1.28) and RM1.40 as tougher upside hurdles. Crucial supports cushioning downside are coming at the 61.8%FR (88sen) and 50%FR (76sen).

Asian Markets Mixed as Traders Digest Key Economic Data

Asian markets were mixed on Thursday as traders digested a slew of economic data from the region while looming tariff threats by US President Donald Trump dampened sentiment. However, Chinese stocks helped offer some lift to regional markets after multiple Chinese government departments rolled out medium and long-term investment plans with clear measures to revive confidence in its capital markets. In a bid to shore up its underperforming stock market, China’s financial regulators urged large state-owned mutual funds and insurers to guide hundreds of billions of yuan into the purchase of stocks.

On economic news, Singapore reported higher-than-expected inflation in December at 1.8% while South Korea’s fourth-quarter GDP growth was below analyst expectations, expanding 1.2% year-on-year, its slowest expansion since the second quarter of 2023. In Japan, the Nikkei 225 rose 0.79% to 39,958.87 and the broad-based Topix added 0.53% to 2,751.74. Meanwhile, in Australia the S&P/ASX 200 slipped 0.61% to 8,378.70 while South Korea’s Kospi lost 1.24% to 2,515.49. In mainland China, the Shanghai Composite gained 0.51% to close at 3,230.16, while Hong Kong’s Hang Seng Index lost 0.4% to 19,700.56.

Wall Street Rose as Traders Digest Trump’s Davos Speech

Wall Street’s main indexes closed higher overnight after President Donald Trump called for lower interest rates and urged OPEC to lower crude prices. The Dow Jones Industrial Average rose 0.92% to close at 44,565.07. The S&P 500 gained 0.53% to 6,118.71, while the Nasdaq Composite added 0.22% to 20,053.88. The focus turned to Trump's remote speech at the World Economic Forum in Davos for more insight into his trade policy. Donald Trump hinted at a coming clash with Federal Reserve Chair Jerome Powell and other central bankers as he spoke virtually before the World Economic Forum, saying he would "demand" lower interest rates.

The comment from the new president was the latest sign of a possible collision course between Trump and Powell in the months ahead. Trump also called on the Saudi Arabia-led Organization of the Petroleum Exporting Countries to lower the price of oil. The fourthquarter earnings season is also off to a strong start, with Netflix and big banks offering positive reports. However, American Airlines poured some cold water on that enthusiasm, with the stock tumbling more than 8% after the company issued weak guidance.

Source: TA Research - 24 Jan 2025