Malaysia Market Daily - Rebound on Hints to End of US Debt Deadlock.
BUY AirAsia & Tenaga . FBM KLCI Resistance at 1,780, Support at 1,763
The local stock market fell Wednesday with blue chips suffering losses which forced the
benchmark index to close at the day’s low, as investors continued to worry over the protracted US government shutdown and looming debt ceiling deadline crisis. The KLCI lost 8.38 points to end at 1,769.12, off an early high of 1,775.04, as losers edged gainers 381 to 321 on flat total volume of 1.51bn shares valued lower at RM1.35bn as compared to the previous day.
With hints emerging overnight that the US shutdown and debt ceiling impasse is nearing an end as political agreement could be reached soon, local blue chips should stage rebound from yesterday’s slump. Immediate support remains at the 50-day moving average now at 1,763, with stronger supports from the 1,747-1,753 gap-up of 10 September, and subsequently 1,738, the 38.2% Fibonacci Retracement(FR) level of the 7/2/13 low of 1,597 to the all-time high of 1,826. Immediate resistance stays at Monday’s high of 1,780, with tougher hurdles from 1,805, the 20 Sept peak, followed by the July pivot high of 1,811 and all-time high of 1,826.
BUY AirAsia & Tenaga
A DMI buy signal on AirAsia implies good rebound potential, with a confirmed breakout above the upper Bollinger band (RM2.70) to target RM2.81 (23.6%FR), RM3.01 (38.2%FR) and RM3.17 (50%FR) ahead, while key chart supports are at RM2.49 (Dec 2012 low) and RM2.44 (Aug 2013 low). Meantime, Tenaga will need decisive breakout from current congestion to re-test RM9.41 (19/7/13 peak), with confirmed breakout to target RM10.03, RM10.41 and RM10.72 going forward, while key retracement support is available at RM8.79 (23.6%FR).
Most Asian Stocks Rebound on Janet Yellen’s Appointment News
Most Asian stocks reversed earlier losses as investors in Asia weighed the U.S. government's ongoing partial shutdown against news that President Barack Obama will nominate Janet
Yellen as Federal Reserve chairwoman. Asia initially took its lead from the U.S., where Wall Street fell Tuesday as the stalemate in Washington fueled fears that the world's largest economy might breach the federal debt ceiling, causing the Treasury to default on debt. Mr. Obama warned Tuesday of "economic chaos" if the U.S. fails to pay its bills. But for the
second day in a row, Asian stocks managed to shake off some of their earlier weakness, with several markets moving into positive territory or close to the break-even point after The Wall Street Journal reported that Mr. Obama plans to announce later in the day that he is
nominating Federal Reserve Vice Chairwoman Janet Yellen as its new leader.
Japan's Nikkei share average recovered from a five-week low on Wednesday, helped by news t hat President Barack Obama has tapped Federal Reserve Vice Chair Janet Yellen to head the U.S. central bank. The news removed some uncertainty hanging over the market and helped risk appetite, weakening the yen against the dollar. Meanwhile, Hong Kong shares fell on
Wednesday, with investors taking some profit on theoutperforming technology sector as the U.S. fiscal impasse sapped confidence that the world's largest economy will avert a debt default. Chinese internet giant Tencent Holdings fell more than 2% after closing at a record high on Tuesday. Gainers for the day were most Chinese property developers and some alternative energy counters. The next major economic point for Asia will be Chinese data,
with trade and inflation numbers scheduled for release over the weekend and early next
week. Markets will be looking for more signs of an economic recovery. The Hong Kong’s Hang Seng Index slid 144.88 points or 0.63% to 23,033.97 while the
Singapore’s Straits Times Index rose 8.34 points, or 0.27% to 3,154.84.
Dow Creep Higher on Debt Deal Optimism
U.S. stocks staged a slight advance Wednesday, though investors continued to play defense during the ongoing stalemate in Washington. Stocks wavered between mild gains and losses for much of the session. In the latest Washington developments, Republicans and Democrats floated the possibility of a short-term increase in the debt limit to allow time for broader negotiations on the budget. At the same time, Obamabegan inviting lawmakers from both parties to the White House for meetings to discuss the government shutdown and raising the debt limit. The slight shift in tone was aided by a column by House Budget Committee Chairman Paul Ryan of Wisconsin, who urged a negotiated end to the stalemate but did not mention Republican demands for linking changes in the federal healthcare law with government funding.
The market was also relieved that Obama nominated Federal Reserve Vice Chairwoman
Janet Yellen to run the world's most influential central bank, providing some relief to markets that would expect her to tread carefully inwinding down economic stimulus. Yellen, an advocate for aggressive action to stimulate U.S. economic growth through low interest rates and large-scale bond purchases, would succeed Fed chairman Ben Bernanke, whose second term ends on January 31. Shares of Hewlett-Packard Co rallied more than 8% to $22.60 after Chief Executive Meg Whitman said she expects revenue to stabilize in 2014 with "pockets of growth" before the business acceleratesagain in 2015.
The Dow Jones Industrial Average inched up 26.45 points or 0.18% to 14,802.98 while the Standard & Poor's 500 Index added 0.95 points or 0.06% to 1,656.40. The technology-heavy Nasdaq Composite Index fell 17.05 points, or 0.46% to 3,677.77, while the financial index
rose 0.91 points, or 0.34% to 264.43.
by TA Securities