KUALA LUMPUR (Dec 14): The FBM KLCI rose 21.34 points or 1.23%, lifted by banking stocks amid fund managers' year-end window dressing.
At 5pm, the KLCI closed at 1,759 points as Public Bank Bhd, Hong Leong Bank Bhd and Hong Leong Financial Group Bhd ended among Bursa Malaysia top gainers. Bursa Malaysia's finance index rose 387.95 points or 2.38% to 16,656.80 points.
Across Bursa Malaysia, there were 540 gainers versus 331 decliners. Trading volume was 2.43 billion shares worth RM3.26 billion.
CIMB Investment Bank Bhd analyst Nick Foo Mun Pang told theedgemarkets.com: "Year-end window dressing will continue to lift KLCI in the near term. Market breadth was very strong today as well. Our immediate (KLCI) resistant level is 1,770 points, immediate support is 1,750 points."
"The sentiment was good as well, especially in the afternoon after The World Bank upgraded (its 2017) Malaysia gross domestic product (growth forecast) to 5.8%," Foo said.
Earlier today, analysts and remisiers said Malaysian banking shares rose on expectation that Bank Negara Malaysia will raise interest rates following the US Federal Reserve's interest rate hike on Wednesday.
Reuters reported that the US central bank raised rates by a quarter of a percentage point to a range of 1.25% to 1.5%. It was the third rate hike this year. But the Fed's forecast of three additional rate increases in 2018 and 2019 was unchanged from its projections in September.
In Malaysia, SJ Securities Sdn Bhd senior remisier Goh Kay Chong told theedgemarkets.com that technical charts are showing that funds are buying Malaysian banking shares following the US interest rate increase as they expect Bank Negara to follow the US's footsteps.
"That way, Public Bank and all other local banks will benefit from the higher interest rate," Goh said.