The FBM KLCI extended the consolidation phase with further profit taking activities
emerging within the index heavyweights. However, the US stock markets continued
to charge higher led by the technology sector in anticipation of at least 3 rate cuts
by the Federal Reserves in 2024. This is in line with our view that given the US GDP
is still growing in 3Q23 and the inflation data namely the CPI, PPI and PCE came in
within expectations last month, we believe the Fed will be staying less hawkish for
the near term. Meanwhile, closer to home, we remain optimistic in the final trading
week of the year that window dressing activities may emerge and push the FBM KLCI
higher. On the commodity markets, Brent oil prices traded higher above the
Sector focus: We are still expecting buying support to return within the Technology
sector in view of the strong rally in the US. Also, we like the Johor-theme coupled
with the potential revival of the mega infrastructure projects next year, which may
provide an upside move towards the Construction, Properties, Building Materials as
well as the Utilities sectors. We favour the Consumer sector in view of normalising
costs and the ongoing recovery theme post Covid-19 environment.
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