Consolidate Ahead of Key U.S. Employment Report

Blue chips rose for a third straight session on Thursday, with gains led by the transportation, construction and industrial products & services sectors due to bargain hunting interest in datacentre linked counters. The FBM KLCI gained another 10.66 points to end at the day’s high of 1,585.17, off an early low of 1,573.90, as gainers led losers 489 to 388 on a slightly higher turnover of 2.93bn shares worth RM2.11bn.

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

The local market may enter consolidation mode ahead of the weekend, with investors sidelined ahead of the release of key U.S. employment data tonight for clearer direction on the Federal Reserve’s future interest rate policy. 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 Duopharma & Pharmaniaga

Duopharma have a good potential recovery upside to the 38.2%FR (RM1.28), while a confirmed breakout should target the 50%FR (RM1.34) and 61.8%FR (RM1.40) going forward, with downside cushioned by retracement support at the lower Bollinger band (RM1.19) and RM1.15. Pharmaniaga is breaking out from current consolidation, with near-term upside target at the 50%FR (36sen), followed by tougher hurdles at the 61.8%FR (40sen) and 76.4%FR (44sen) ahead, while key uptrend supports come from the 23.6%FR (28sen) and 25sen.

Asian Markets Advance Ahead of U.S. Jobs Data

Stocks in Asia ended higher on Thursday, following the broadly positive cues from Wall Street overnight as traders shrug off a week of trade turmoil ahead of US jobs data. Though many uncertainties remain under U.S. President Donald Trump's new administration, markets were for now relieved that things were not worse, particularly regarding the tit-for-tat tariff moves between the U.S. and its major trading partners. That helped lift global share markets and kept the dollar in check, giving some respite to its peers, which had been heavily battered at the start of the week. Traders will turn their attention to the January nonfarm payrolls report, expected to be released on Friday.

The next Federal Open Markets Committee meeting is in March, and while only 16.5% of traders expect a rate cut then, most traders anticipate a cut in June, according to CME's Fed Watch Tool. Australia’s S&P/ASX 200 jumped 1.23% to 8,520.70, while South Korea’s Kospi rose 1.10% to 2,536.75. Japan’s Nikkei 225 also gained 0.61% to 38,066.53 and the Topix added 0.25% to 2,752.20. In mainland, the Shanghai Composite Index jumped 1.27% to 3,270.66, while Hong Kong’s Hang Seng Index added 1.43% to 20,891.62.

Wall Street Mixed Ahead of Job Data

Wall Street’s main ended mixed in choppy trading overnight as traders await Friday's key jobs data and sifted through several earnings reports. The Dow Jones Industrial Average fell 0.28% to close at 44,747.63. The S&P 500 gained 0.36% to 6,083.57, while the Nasdaq Composite added 0.51% to 19,791.99. The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday. In the run-up to the US payrolls report, data showed initial jobless claims picked up but remained subdued. Separate figures showed solid labour productivity. In addition to the employment print Friday, Wall Street will be closely watching a revision to job growth.

Meanwhile, the tariff jitters that shook stocks earlier in the week may have eased, but markets are tracking incoming earnings for any company warnings. At the same time, tech and chiprelated results are being scrutinized for signals about the strength of AI demand. Honeywell shares ended the day off more than 5%, dragging the Dow lower, after the company issued full-year earnings guidance that fell short of what analysts anticipated. Semiconductor names slid, with Qualcomm and Arm each declining more than 3%. Ford Motor also fell 7% after the automaker forecast a difficult 2025.

Source: TA Research - 7 Feb 2025