KUALA LUMPUR: Investors are on tenterhooks over the US January inflation report, which is due out later tonight, although a bullish rally on Wall Street suggests investors are optimistic over cooling prices.
At the start of trading, Malaysia's benchmark FBM KLCI was up 1.96 points to 1,477.13 as the buying sentiment built up towards the release of the inflation report.
There were 170 gainers to 70 decliners, which suggested another day of broad-based gains for the market.
Most blue chips were positive with banks taking the lead after a recent period of weakness
Maybank gained five sen to RM8.82, Public Bank rose one sen to RM4.20, CIMB added one sen to RM5.45 and Hong Leong Bank remained untraded as at the time of writing.
MR DIY, which is scheduled to release its earnings results this evening, rose three sen to RM1.80.
Technology counters picked up 0.6% on Bursa Malaysia in line with the rally on the Nasdaq overnight. Hextar Technologies was up 62 sne to Rm26.64, MPI grew 40 sen to RM32.54 and KESM rose 18 sen to RM8.98.
Among the most actively traded stocks, Hong Seng rose 1.5 sen to 21.5 sen, CSH dropped 1.5 sen to five sen and VisDynamics gained one sen to RM1.04.
Analysts agree that trading sentiment over the coming term will be dictated by the US consumer price index, which will indicate whether monetary tightening measures to rein in cost increases have proved fruitful.
Bursa Malaysia rallied in the final hour of trading yesterday, which coupled with a positive Wall Street performance overnight, points towards a possible pick-up in buying momentum on the local market.
"With a broad-based rebound on Wall Street overnight, the market could be positioning ahead of the release of the US CPI inflation report, where most of the traders could be anticipating cooling inflation.
"Hence, we believe the bullish sentiment is likely to spill over to the regional markets as well as the local bourse especially on the technology sector," said Malacca Securities Research in its market commentary.
The research firm however noted that the technical indicators remained negative as the MACD Histogram extended a negative bar and the relative strength index hovered below 50.
It said support remained at 1,450-1460 while resistance was set at 1,500-1510.
TA Securities Research in its own commentary also said stocks were likely to stay range-bound due to the uncertainties ahead of US inflation numbers discouraging firmer investor commitments.
"On the index, key chart support stays at 1,460 and 1,450, with stronger supports at 1,420 and 1,400.
"Significant overhead resistance remains at 1,512, with the August high near 1,528 as stronger resistance, followed by 1,550 and 1,570 as tougher upside hurdles," it said.
