Rakuten Trade's Thong expects the FBM KLCI to trade within the 1,660 to 1,680 range for the rest of the week.
KUALA LUMPUR: Bursa Malaysia closed higher yesterday, driven by a positive Wall Street performance overnight and after China announced a stimulus package to jumpstart its struggling economy, sparking a rally in regional and global shares.
The FBM KLCI rose 5.07 points, or 0.30%, to 1,670.37 at the close from Monday’s showing. The benchmark index opened 1.95 points higher at 1,667.25 and traded between 1,665.51 and 1,671.47 throughout the session.
In the broader market, gainers led decliners 558 to 549, while 508 counters were unchanged, 890 untraded and 19 suspended. Turnover improved to 3.51 billion units worth RM3.10bil from Monday’s 3.36 billion units worth RM3.1bil.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said China’s stimulus package would likely create a spillover effect for regional economies.
He noted that Asian stocks surged to their highest levels in over 2½ years, driven by strong gains in the China and Hong Kong stock markets.
“The local benchmark index is re-testing the 1,670-point resistance level, and we believe that breaking and holding above this level could unlock further upside. If 1,670 is breached and sustained, we anticipate additional gains.
“As such, we expect the FBM KLCI to trade within the 1,660 to 1,680 range for the rest of the week,” he told Bernama.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said the People’s Bank of China’s reduction in the bank reserve requirement ratio further bolstered market sentiment.
Additionally, Malaysia’s inflation eased to a four-month low of 1.9% in August, creating a favourable environment for consumer and industrial stocks.
“Lower inflation enhanced consumers’ purchasing power, driving demand for non-essential goods, while stronger economic prospects boosted industrial stock performance,” he said.
Mohd Sedek noted that Bursa Malaysia’s transportation and logistics, as well as the consumer products and services sectors, were among the top performers.
