The FBM KLCI extended the pullback for the second session with further profit taking
activities from the banking heavyweights. Meanwhile, Wall Street ended positively
after a sharp one-day pullback despite the US GDP being revised lower at 4.9% for
3Q23, while jobless claims came in at 205k vs. estimates of 214k. Market will be
watching the Federal Reserve’s preferred PCE Inflation report that will be released
later tonight; as of this juncture, the dollar index headed lower with the anticipation
of the dovish stance from the Fed next year. Following the positive rebound on Wall
Street, buying interest may return to the local exchange. On the commodity markets,
Brent oil prices steadied around the USD80/bbl as record US production and rising
inventories offsetting the tensions in the Middle East, limiting the upside at this
Sector focus: Traders could relook into the Technology sector after the strong
rebound on Wall Street, as we noticed overall earnings have been stabilising at least
for the past 2 quarters. Meanwhile, we favour the infrastructure theme next year
coupled with the Johor-region focus theme. Thus, we believe it should benefit the
Construction, Property, Building Material and Utilities sectors.
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