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Market Pulse
Daily updates brought to you by Malacca Securities. 

FMB KLCI - DAILY - 22/3/2018



No Impetus Yet
• Tracking the weakness on Wall Street overnight, the FBM KLCI (-0.2%) extended its losses after lingering in the negative territory for the entire trading session yesterday. The lower liners also ended mostly lower as the FBM Small Cap and FBM ACE fell 0.2% and 0.4% respectively, while the FBM Fledgling closed relatively unchanged. The broader market, meanwhile, finished mixed.

• Market breadth stayed negative as losers outpaced winners on a ratio of 469-to-363 stocks. Traded volumes eased 10.6% to 2.59 bln shares amid the negative market sentiment.

• Tenaga (-18.0 sen) led the local bourse decliners list, followed by Petronas Chemicals (-11.0 sen), Nestle (-10.0 sen), CIMB (-8.0 sen) and Genting Malaysia (-3.0 sen). Notable decliners on the broader market were Panasonic Malaysia (-16.0 sen), Genting Plantations (-12.0 sen), Heng Yuan (-12.0 sen), SAM Engineering & Equipment (-12.0 sen) and Chin Teck Plantations (-10.0 sen).

• On the flipside, Carlsberg (+34.0 sen), Aeon Credit (+24.0 sen), Fraser & Neave (+14.0 sen) and JF Technology (+12.5 sen) advanced on the broader market. Salcon added 2.0 sen after bagging a water treatment plant construction in Sabah. Meanwhile, Petronas Dagangan (+14.0 sen), Top Glove (+8.0 sen), KLK (+6.0 sen), Sime Darby Plantations (+6.0 sen) and Hartalega (+5.0 sen) rose on the FBM KLCI.

• Asian benchmark indices ended mixed as the Nikkei (+0.2%) rebounded, lifted by the weaker Japanese Yen against the Greenback. The Hang Seng Index fell 0.5%, while the Shanghai Composite (-0.01%) ended marginally lower amid renewed concerns over the Sino-U.S. trade spat. ASEAN stockmarkets, meanwhile, closed mixed on Wednesday. 

• U.S. stockmarkets ended mostly lower as the Dow (-0.6%) extended its losses as fresh concern over U.S.-China trade spat overshadowed the U.S. Federal Reserve dovish stance on no further rate hike in 2019 amid the slowdown in its economic growth. Similarly, the S&P 500 fell 0.3%, dragged down by the weakness in the financial sector (-2.1%), but the Nasdaq rose 0.1%.

• Earlier, major European indices – the FTSE (-0.5%), CAC (-0.8%) and DAX (-1.6%), all fell after the U.K. officially requested for a delay on its departure from the European Union to 30th June 2019 (previously 29th March 2019). The weakness was also compounded with fresh uncertainty over Sino-U.S. trade deal.



THE DAY AHEAD


• There remains no change to the immediate market outlook with the dour trend likely to persist amid the lack of new leads to entice fresh buying. Instead, we think that the profit taking activities will continue as market players unwind their recent positions. 

• Overseas markets are also not providing the much need impetus as the trade talks between the U.S. and China appears to be stalling that is likely to leave most markets wary of the outcome. At the same time, there are still concerns over the global economic outlook with a slower growth in the offing that could also affect corporate earnings growth. 

• With the FBM KLCI likely to head lower again, the supports are now at the 1,680-1,683 levels and 1,678 respectively. The resistances, meanwhile, are at 1,687 and 1690 respectively. 

• The FBM Small Cap, Fledgling and ACE Market indices are undergoing a consolidation spell that looks to continue as there are fewer compelling buys after their substantive gains over the past three months.  Still, the consolidation has been relatively mild and the downside is likely to find some support from bargain hunting activities. 




 

The Market Pulse is a proprietary report courtesy of Malacca Securities Sdn Bhd (a participating organisation of Bursa Malaysia Securities Berhad) and has been abbreviated by Focus Malaysia. The report is for information purposes only and is not a recommendation to buy or sell any securities or financial instruments.

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