KUALA LUMPUR: Asian markets rallied yesterday, with Japan's Nikkei 225 gaining more than 1.4% and extending its positive run to nine days, the longest streak in 21 years.
The Asian markets rose on expectations of better-than-forecast corporate earnings, as well as on the indication of positive global growth as oil prices climbed to near the US$69 (RM243.57) per barrel mark.
Global markets will have a keen eye on the US gross domestic product data for the second quarter of 2009, as positive news flow would indicate that a recovery in the second half of 2009 was on track.
European markets also stayed in positive territory in early trade yesterday, and continued to extend their sharp two-week gain on optimistic corporate earnings outlook.
At the Asian markets, the Nikkei 225 rose 1.45% to 10,088.66, Hong Kong's Hang Seng Index gained 1.35% to 20,251.62, Shanghai's Composite Index 1.86% to 3,435.21, the South Korean Kospi 1.43% to 1,524.05, Taiwan's Taiex Index 0.79% to 7,028.43 and Singapore's Straits Times Index 1.71% to 2,576.66.
Light crude oil rose 53 cents to US$68.58. Crude palm oil futures for the third-month delivery fell RM24 per tonne to RM2,098.
At Bursa Malaysia, the FBM KLCI clawed back from its earlier losses in the day to close 0.05% or 0.55 of a point higher at 1,156.43. The index had stayed in negative territory since opening yesterday and fell as much as 7.62 points to its intra-day low of 1,148.26.
According to HwangDBS-Vickers Research, FMB KLCI, trading at the highest in almost a year, may extend gains to 1,230 in the coming weeks, driven by a "liquidity tide" and defying concerns that shares are overbought.
Liquidity is "conspicuously back, promising to propel our Malaysian bourse on a bullish trajectory ahead", the research house said yesterday. Investors will be "combing through the sectors for laggard plays since the headline valuations are no longer cheap," it said.
The benchmark gauge, which has jumped 8.3% the past two weeks, needs to surpass the intermediate resistance hurdles of 1,160 and 1,190 to reach the 1,230 target.
The stock index's Relative Strength Index, which measures how rapidly prices have advanced or dropped during the specified time period, has in the past eight days been above 70, a level that some investors see as an indication that prices are poised to fall.
Turnover yesterday was 987.32 million shares valued at RM1.22 billion. Gainers led losers by 455 to 216, while 238 counters traded unchanged.
Jupiter Securities Sdn Bhd head of research Pong Teng Siew said the trend at Bursa Malaysia was pretty much as he had anticipated, as funds that had been buying were now perhaps taking profit.
"We also do not see many new funds coming in to absorb the selling, and foreign funds are fairly limited now."
"There could be a resumption in the upswing over the next couple of days given the fairly good global sentiment but investors must keep tabs on new developments as the rally could stop at anytime, as valuations are not cheap anymore," he said.
On the sectors that had done well year-to-date, Pong said participation in the market had been focused on blue chips in the early stages of the rally, and that the second and third liners were beginning to catch up recently.
He said that generally, the finance and consumer sectors had performed fairly well, but added that certain selected stocks within the sub-sectors could have attracted more investor attention than others.
Among the top gainers yesterday were PPB Group Bhd, which added 90 sen to RM14.50; Tanjong plc up 40 sen to RM14.70, Malaysian Pacific Industries Bhd up 35 sen to RM6 and Hartalega Holdings Bhd gained 30 sen to RM4.80.