FBM KLCI gains 0.39% as stimulus hopes spur markets

FBM KLCI gains 0.39% as stimulus hopes spur markets
-A +A

KUALA LUMPUR (Aug 20): The FBM KLCI closed up 6.3 points or 0.39% today, after global share markets rose on stimulus hopes in major economies like China and Germany, amid slowdown concerns due to the US-China trade war.

In Malaysia, analysts said investors are also taking cue from the current corporate financial reporting season for the April-to-June quarter. At 5pm today, the KLCI ended at 1,602.75, as components, including Petronas Dagangan Bhd and CIMB Group Holdings Bhd, closed among Bursa Malaysia top gainers.

RHB Investment Bank Bhd regional equity research head Alexander Chia said the market is still looking for more signals to get a sense of how the Malaysian corporate sector will fare this year. 

"Investors are likely to remain trading at range-bound (levels), as they evaluate corporate earnings reports released within the next two weeks.

"It is still a bit too early to point out any trends, but so far, corporate earnings have been in line or below our expectations. I can't recall any surprises on the upside," Chia told theedgemarkets.com. 

Globally, Reuters reported Asian shares rose on Tuesday, as hopes for stimulus in major economies tempered anxiety about a global recession, boosting riskier assets and drawing money from safe-havens such as bonds and gold.

It was reported hopes for additional stimulus are rising after reports Germany is prepared to increase fiscal spending, and after the People's Bank of China took steps to lower corporate borrowing costs.

According to Reuters today, China had on Saturday, set its new one-year loan prime rate at 4.25%, down 6 basis points from 4.31% previously. On Sunday (Aug 18), German Finance Minister Olaf Scholz suggested Berlin could make available up to 50 billion euros (US$55 billion) of extra spending, Reuters reported.