KUALA LUMPUR: Bursa Malaysia Securities turned in the best performance in Asia on July 16 and added another RM7.49 billion to market capitalisation at the close, bringing the total gains for three consecutive trading days to RM31.09 billion.

The benchmark index, FBM Bursa Malaysia KLCI, surged as many as 23.17 points to 1,120.41, but closed at 1,108.88, up 11.64 points or 1.06% from the previous day as the inevitable profit- taking activities set in.

Analysts said volatility may continue for some time before stability returned in the form of more certainty in the global economy.

The FBM KLCI’s close was the highest since Aug 29 last year. The intra-day high compares with the peak of 1,127.46 on Aug 11, 2008. Regional markets too gave up some of the gains from earlier this week as selling pressure emerged in the later part of the day.

Japan’s Nikkei 225 closed 0.81% higher at 9,344.16; the South Korean Kospi rose 0.8% to 1,432.22, Taiwan’s Taiex Index added 0.62% to 6,780.3, Hong Kong’s Hang Seng Index was up 0.57% to 18,361.87 and Singapore’s Straits Times Index gained 0.49% to 2,401.02.

The Shanghai Composite Index, however, fell 0.15% to 3,183.74.

Regional markets had started on a positive note on the back of the strong closing on Wall Street, and received a further boost from China’s better 2Q09 gross domestic product numbers. The Dow Jones Industrial Index surged 3.07% or 256 points to 8,616.21.

The Chinese economy grew at a faster rate of 7.9% in the second quarter (2Q), well above the 6.1% growth registered in 1Q, spurred by massive government spending and a big spike in bank lending.

However, with share prices having risen for the better part of this week, investors are locking in some of their gains.

European markets, that appeared to give some up gains from earlier this week in early trade, turned slightly positive after JP Morgan released better-than-expected 2Q results.

Over on Bursa Securities, turnover surged 22% to 1.67 billion units valued at RM2.14 from 1.37 billion units or RM1.79 billion worth of trade. Gainers outpaced losers 398 to 304, while 229 counters were traded unchanged. Since Monday’s close, market capitalisation over the past three days rose 3.8% to RM842.81 billion.

The ringgit closed marginally higher against the US dollar and was quoted at 3.5630 per dollar at 5pm on July 16 versus 3.5680 the previous trading day.

Crude palm oil futures fell RM52 per tonne to RM2,063 for August delivery and RM72 per tonne to RM2,031 for September delivery. Crude oil fell 72 cents per barrel to US$60.82 (RM217.13) as at 6.30pm on July 16.

MIDF Research head Zulkifli Hamzah said the strong market performance on July 16 was due to the wave of optimism from regional and overnight US markets.

He said participation was reasonably broad-based, adding that retail investors in particular were back as evidenced by movement in penny stocks and the fact that trading volume exceeded one billion shares.

Zulkifli said the rally was sustainable provided that the momentum in external markets remained intact, and that there was no immediate country-specific risk as far as Malaysia was concerned.

“Asian equity is just enjoying a renaissance resulting from a flow of global liquidity as a result of pump priming measures and easy money policy around the world.

“More importantly, the currency risk in holding the greenback, which was less of a factor before the financial crisis, has increased the relative attractiveness of markets in Asia.”

Zulkifli said while sentiment on Wall Street had been particularly positive this week given strong earnings numbers, bouncing back from the low, the worry was that once the reporting season was over, the spectre of slowdown may come back to haunt the market.

“The downside risk, if at all, can be found in the technical indicators. The market appears to be overbought, although all the indicators may not be in agreement.

“For example, today the 14-day relative strength index (RSI) exceeded the critical upper range of 70 points. However, there has yet to be any clear technical pattern forming,” he said.

Among the major gainers at Bursa Malaysia were Axiata Group Bhd, Sime Darby Bhd, Tenaga Nasional Bhd, AMMB Holdings Bhd and Malayan Banking Bhd.

Axiata added 15 sen to RM2.85, Sime and Tenaga up 10 sen each to RM7.45 and RM8, AMMB gained 14 sen to RM3.82 while Maybank and Public Bank Bhd rose five sen each to RM5.95 and RM10.

Genting Malaysia Bhd gained seven sen to RM2.78, PLUS Expressways Bhd up six sen to RM3.24, Telekom Malaysia Bhd added four sen to RM2.99 while Kumpulan Perangsang Selangor Bhd and Puncak Niaga Holdings Bhd rose 16 sen each to RM2.07 and RM3.12.

Among the losers, Hartalega Holdings Bhd fell 12 sen to RM4.56; Top Glove Corporation Bhd, Voir Holdings Bhd and Genetec Technology Bhd fell 10 sen each to RM7.25, RM1.38 and 20 sen, respectively.

Other losers included Tahps Group Bhd, Petra Energy Bhd and Ge-Shen Corporation Bhd.

KNM Group Bhd was the most actively traded counter with 131.55 million shares done. The counter gained 1.5 sen to 85 sen.

Other actively traded stocks included Saag Consolidated (M) Bhd, Axiata, Jaks Resources Bhd, Talam Corporation Bhd, UEM Land Holdings Bhd and Scomi Group Bhd.