Opening Daily Highlight
Local
Massive sell-off
Thu, 19-Dec-2024 07:30 am
by Research Team • Apex Research

  • Malaysia Market Review: FBM KLCI closed higher +0.1%, lifted by buying interest in blue-chip heavyweights. Similarly, the lower liners rebounded, while the Healthcare sector (+2.6%) outperformed among its sectoral peers.

     

  • Global Markets Review: Wall Street tumbled sharply as Powell's hawkish tone on the rate outlook rattled the stock market. Meanwhile, Asian markets were mostly mixed ahead of the Federal Reserve’s rate decision, while the European markets rebounded as investors reacted positively to the UK's persistent inflation data, suggesting little to no likelihood of an interest rate cut by the Bank of England.

     

  • Market Outlook: We expect negative sentiment from global markets to spillover onto the local bourse following the announcement of fewer rate cuts moving into 2025. Similarly, lower liners are likely to trade with a downward bias, reflecting the subdued market sentiment. The Federal Reserve has lowered its overnight borrowing rate by 25 bps to a target range of 4.25%-4.5%, meeting expectations. However, the Fed signalled plans for only two rate cuts in 2025, down from the four cuts forecasted previously. For now, investors will focus on rate decisions in the UK and Japan, as well as US home sales data.

     

  • Sector focus: We continue to recommend going long on gold-related stocks, as bullion typically performs well during weaknesses in the stock market. We also favour the export sector stem from better-than-expected November data which saw the Malaysia’s trade surplus reaching a record high for the year. Meanwhile, the Plantation sector may see some profit taking activity following the ongoing pullback in CPO prices.

     

  • Technical Commentary: The FBM KLCI formed a bullish candle as the key index closed marginally below the 1,600 level. Indicators remained mixed as MACD Line floated above the Signal Line, while the RSI lingered below 50. Immediate resistance is located at 1,625. Support is envisaged around 1,570.

Sentiment: Negative
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Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 4.373243 4.414705
EUR 4.565507 4.577376
CNY 0.602867 0.604630
HKD 0.561419 0.566456
SGD 3.236779 3.265133