Thursday 28 Mar 2024
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KUALA LUMPUR: Asian markets rallied on Sept 8, with the FBM Kuala Lumpur Composite Index (FBM KLCI) breaking through the psychological 1,200 resistance level to its highest since June last year, underpinned by optimism of global economic recovery in the second half (2H) of the year.

The positive sentiment was boosted by the surge in commodity prices, including gold, which crossed the US$1,000 (RM3,510) level. It was also shored up by Sept 4’s US job data and a weekend agreement by the Group of 20 (G20) nations to continue with their economic stimulus packages.

The confluence of upbeat factors sent emerging market stocks to a new year high, rising to levels last seen before the Lehman Brothers collapse in September last year, and world stocks headed firmly towards a new 2009 peak.

Major Asian markets chalked up gains of up to 2.14% while the optimism also spilled over to European bourses, sending the Standard & Poor’s 500 Index futures up more than 1%.

Markets in the US, which resumed trading after a long Labour Day weekend, opened 0.54% higher at 9,491.83.

Indicative of the optimism of economic recovery, prices of the benchmark one-gigabit computer-memory chip climbed to US$1.71 on Sept 8 from as low as 58 US cents in December, according to DRAMeXchange Technology Inc,  the Taiwan-based operator of Asia’s biggest spot market for the chips.

Meanwhile, Bloomberg reported that Goldman Sachs Group Inc raised its forecasts on Sept 8 for metals because of “increasing evidence of a stronger-than-anticipated recovery in global industrial activity”.

In key Asian markets, Hong Kong’s Hang Seng Index jumped 2.14% to 21,069.81 points, Shanghai’s Composite Index added 1.71% to 2,930.48 and the Shenzhen Composite Index shot up 2.08% to 999.78. Singapore’s Straits Times Index rose 0.64% to 2,660.91 and Japan’s Nikkei 225 was up 0.7% to 10,393.23.

Nymex crude oil for one-month delivery hit US$71.01 per barrel, up US$2.90 at 9pm while spot gold prices crossed US$1,000 an ounce to a high of US$1,007.70 on a weakening US dollar.

The dollar index that measures the US currency against a basket of six major world currencies was at its lowest in almost a year at 77.274 points at 7.20pm in Malaysia, and fell almost 1% during the day.

Taking cues from strong gains on Wall Street on Sept 4 and surging regional markets on Sept 7 and on Sept 8, the FBM KLCI rose 0.98% or 11.68 points to 1,202.07, its highest since June last year.

The breaching of the 1,200 mark, considered a psychological resistance level, pointed to a prolonging of the now 5½-month rally in the local market, said a RHB Research Institute chartist.

“This is the second-time lucky for the KLCI which looked like it could have turned to correction mode earlier last week, but the movements from Wednesday to Friday changed that,” he said. The market had shown similar technical signs of a possible correction in early July, before continuing its rally.

Crossing the 1,196 technical resistance and the 1,200 psychological resistance levels was confirmation of RHB Research’s target of 1,250 points for the FBM KLCI “soon”, or roughly in one or two weeks, the chartist said.

For the rally to hold for the next one or two weeks, the bellwether index should not drop below the support levels of 1,150 and 1,160, he said.

Crude palm oil (CPO) for third-month delivery rose RM85 to RM2,197 per tonne on Sept 8. Plantations gained the most among the index-linked stocks, followed by banks.

Funds snapped up plantation heavyweights including Sime Darby Bhd, IOI Corporation Bhd and PPB Group Bhd. Sime Darby rose 33 sen to RM8.60, IOI 18 sen to RM5.26 and PPB six sen to RM15.64.

Tanjong plc gained 24 sen to RM15.90, UMW Holdings Bhd 15 sen to RM6.45, MISC Bhd 10 sen to RM9 and Axiata four sen to RM3.14.

Bumiputra-Commerce Holdings Bhd added 14 sen to RM10.48, Malayan Banking Bhd five sen to RMM6.55 and Hong Leong Bank Bhd four sen to RM6.44.

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