Malaysian shares seen tracking crude oil, US share gains

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KUALA LUMPUR (Jan 30): Malaysian shares may today track the overnight rise in crude oil prices and US shares. The weaker ringgit will also be closely watched.

Higher crude oil prices could direct the spotlight on oil and gas-related firms like KNM Group Bhd and SapuraKencana Petroleum Bhd.

Meanwhile, a weaker ringgit versus the US dollar may lure investors into export-based companies. These include semiconductor manufacturers like Malaysian Pacific Industries Bhd and Unisem (M) Bhd, which are deemed beneficiaries of improving prospects in major importer US.

Reuters reported that oil prices had risen broadly after preliminary US data showed weekly US jobless claims at a near 15-year low, indicating further strength in the world's largest economy.

US crude settled up 8 cents at US$44.53 a barrel, recovering from its session low of US$43.58. Traders said some market bears cut back on their short positions after noting reductions in capital spending and exploration by U.S. oil firms reporting quarterly earnings.

The Dow Jones Industrial Average rose 225.48 points, or 1.31 percent, to 17,416.85, the S&P 500 gained 19.09 points, or 0.95 percent, to 2,021.25 and the Nasdaq Composite added 45.41 points, or 0.98 percent, to 4,683.41.

Despite US market gains, technical analysts in Malaysia however warned of further profit taking in the FBM KLCI today.

AllianceDBS Research Sdn Bhd analyst Teoh Chang Yeow said the KLCI could see profit taking in anticipation of further losses in the broader market. Yesterday, the KLCI fell 13.7 points or 0.76% to settle at 1,782.18 points.

"Following the weak down close, the market is expected to trade lower again as those who had missed out on the profit taking opportunity between 23 and 28 Jan 2015 would likely lock in a portion of their stock gains in the near term. The immediate support zone is pegged between 1,760 and 1,770,"  Teoh said.