KUALA LUMPUR (March 24): The FBM KLCI extended its gain this morning as investors took a positive view of news that the US Federal Reserve (Fed) pledged an unlimited quantitative easing to stabilise the world’s number one economy.

At the time of writing, the FBM KLCI was up 2.72%, lifted by Bursa Malaysia’s top gainers Public Bank Bhd (up RM1.20 or 8.63% to RM15.10) and Hong Leong Bank Bhd (up RM1.20 or 9.45% to RM13.92).

Broad-based buying was seen at Bursa Malaysia with the FBM ACE Index up 4.45%, while the FBM Small Cap index gained 3.48%. Across the bourse, some 1.12 billion shares, valued at RM612.77 million, were traded.

“The small caps have lost about 50-60% from its peak compared with the big caps,” said a market analyst contacted by theedgemarkets.com.

“But I would still look for the indicators before entering, particularly the peak of the Covid-19 outbreak. The US market did not react to the news from the Fed as the measure was to address the downcycle, but not Covid-19 and the short-term impact,” the analyst said.

The Washington Post reported that the Fed is buying unlimited amounts of US Treasurys and mortgage-backed securities, an extraordinary backstop for lending markets that goes much further than what the central bank did in the 2008-2009 crisis.

Meanwhile on Covid-19, the US has the third most confirmed cases globally with 6,670 new cases, bringing the total confirmed cases to 43,667, behind Italy’s 63,927 and China’s 81,173.

The two other countries with the highest patient count are European countries Spain and Germany, with 35,136 and 28,729 confirmed cases respectively.

The Euro Stoxx 50 index fell 2.47%, trailing the 2.93% overnight decline in the S&P 500 index.

Elsewhere, Japans’ Nikkei 225 rose 6.74%, Hong Kong’s HSI rose 3.72%, while China’s CSI rose 1.96%, as the Fed indication provided some respite on recession risks.

On Bursa Malaysia, put warrants led the losers, including SP500-HJ (down 40 sen or 10.58% to RM3.38), HSI-H8T (down 39 sen or 13.88% to RM2.42) and HSI-HAF (down 38 sen or 19.89% to RM1.53).

The news in the US also lifted commodities like oil — also a function of economic growth — which traded up 3.81% to US$28.06/bbl at press time, having traded between US$27.15 and US$28.40 earlier.

The broader buying and higher oil price has brought the attention in Bursa Malaysia back to energy stocks, with the Energy Index rising 5.97%.

Oil and gas counters crowded the actives in Bursa Malaysia, including Hibiscus Petroleum Bhd (up 8.77%), Sapura Energy Bhd (up 14.29%), Perdana Petroleum Bhd (up 8.33%) and Bumi Armada Bhd (up 8.7%). 

Also leading the gainers were the Technology Index (up 5.63%) and Financial Services Index (up 5.34%).

On currency, the Malaysian ringgit drifted 0.45% higher against the US dollar at 4.4270, having traded at 4.4225/4.4480 earlier, lifted by higher oil prices and as investors sold the safe-haven greenback. Meanwhile, the US dollar also weakened 0.8% against the Japanese yen to 110.340.

The ringgit also strengthened 0.25% against the Singapore dollar to 3.0428, and gained 0.53% against the Thai baht to 13.472.

At home, the Covid-19 outbreak appears to be escalating, with 212 confirmed cases announced by the Health Ministry on Monday, bringing the total to 1,518. There were 159 cured cases, while 14 patients have passed away.