rakuten trade market reports : Page 37

Dow Jones Industrial Average Index tumbled 389 points yesterday amid the heightened uncertainties of US-China Trade war. The 10-year treasury yield dropped to 1.64%, its lowest since October 2016.
We expect KLCI to remain volatile due to global markets uncertainties. Hence, we recommend investors to buy on weakness with focus on the heavily oversold index-linked counters, and keep an eye on bargain hunting on small mid cap stocks and construction related stocks

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Regional markets were generally weaker while Dow Jones gained 0.7% to 25,897.71 points due to ongoing trade concern between US and China coupled with US bond yield hitting all time low.
The FBM KLCI managed a small rebound following sell down of our market, inching up 4.6 points or 0.29% for the week to 1,615.05. Foreign funds continued its risk off mode among emerging markets with RM1.03bn weekly net outflow.
Performance amongst the FBMKLCI components saw 23 gainers to 6 losers. Top 3 performers include SimePlant (+4.94%), RHB (+4.88%) and MAHB (+3.16%) while the 3 losers were GENM (-10.80%), Genting (-6.78%) and HLFG (-1.37%).

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Trumpâ€™s itchy fingers continued as he now targets the Feds reluctance to cut rates further as the main reason for the relatively strong USD. In view of this, we can expect the USD to depreciate as a counter action for the weakening Chinese Yuan.
Meanwhile, we reckon this should be positive for regional currencies and are maintaining our stance that the MYR to re-test the RM4/USD1 by year end. Maybe this is also the precursor for foreign investors to relook at the emerging markets.
On the local front, we expect the FBM KLCI to be flattish with some upside bias as investors may not be willing to commit over the extended weekend.

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The slump in the US 10-year Treasury yield should see some funds returning to equities as we reckon the decline was a tad too steep. The US 10-year yield touched 1.71% yesterday which is a 2-year low.
Regional central banks were also taking turns in revising their rates yesterday namely New Zealand (-0.50%), India (-0.35%) and Thailand (-0.15%) as we may be entering into the realm of lower rates soon amid the trade war uncertainties.
As such, we envisage such moves to be positive for equities and may see some buying momentum on the local bourse today. Immediate resistance for the FBM KLCI is seen at 1,620 level.

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Financial markets look to be stabilising for now. Wall Street rebounded following a bloodbath on Monday. Nonetheless, we reckon investment climate is still volatile and prefer Mr Trump to zip his mouth shut.
On the whole, investors remain jittery with many central banks are now looking to revise their respective interest rates lower.
On the domestic front, we believe there to be some profit taking activities today as the market is expected to be in a consolidation mode.

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