DESPITE another record closing from the Dow Jones Industrial Average (Dow), most Asian markets ended lower.
Sentiment was dampened by further slide in Shanghai Composite Index (-1% to 3,169) after another much-anticipated policy briefing that failed to meet market expectations, raising doubts that the recent stimulus measures announced will be enough to revitalise its beleaguered economy.
“The Dow jumped 161 points to close at a fresh record high of 43,239, buoyed by strong earnings (that is TSM and TRV) and positive economic data that is solid retail sales report and lower weekly jobless claims,” said Hong Leong Investment Bank (HLIB) in the recent Trader’s Brief.
Meanwhile, the US10Y bond yield soared 8 basis points to 4.08% as the strong economic data supported the view that the US economy remains resilient, dampening expectations for future aggressive rate cuts. After hours, NFLX shares rallied 4.7% amid upbeat earnings.
In tandem with another record closing from Dow and the return of net inflows by foreigners, KLCI rose 8.8 points to 1,641.4, led by buying interests on MAYBANK, PBBANK, RHBBANK, TENAGA and PCHEM.
Market breadth returned to positive at 1.62 vs 0.49 previously. Foreign institutions were major net buyers for a third consecutive day (+RM226mil, Oct: -RM756mil, YTD: +RM2.80bil) while local institutions (-RM187mil, Oct: +RM577mil, YTD: +RM1.88bil) alongside local retailers (-RM39mil, Oct: +RM179mil, YTD: -RM4.68bil) emerged as major net sellers.
As investors await the details of Budget 2025 today, KLCI is likely to trend sideways with an upside bias (support: 1,606-1,625; resistance: 1,650-1,663-1,677), buoyed by the bullish Wall St and the return of net foreign inflows (potentially rotating from the steeply overbought China & Hong Kong markets).
However, the outlook is tempered by ongoing concerns about a potential regional conflict in the Middle East, the political dynamics during the US elections countdown (Nov 5) coupled with uncertainty surrounding China’s stimulus measures and its economic recovery roadmap. – Oct 18, 2024
Main image: newstraitstime
