KLCI back above 1,600 on strong bargain hunting

KLCI back above 1,600 on strong bargain hunting
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KUALA LUMPUR (Dec 1): The FBM KLCI swiftly rebounded today on strong bargain hunting, reversing almost all of yesterday’s losses caused by a sharp 11th-hour selldown.

The benchmark index closed 39.55 points or 2.53% higher at 1,602.26. It had risen nearly 40 points within the first one-and-a-half hours to breach the 1,600 level.

TA Securities Holdings Bhd senior technical analyst Stephen Soo said external factors, such as China’s manufacturing sentiment that hit a decade high and the acceleration in vaccine development, triggered the optimism in the market.

He said yesterday’s selldown was overdone and exaggerated. “It was anticipated among the investor fraternity that there will be a selldown but not as drastic as yesterday’s,” he told theedgemarkets.com.

Going forward, Soo said the market trend will continue to be choppy and see more vaccine and recovery play. “From the rubber glove players, there will be a rotational play to vaccine and economic recovery play [sectors],” he said.

He saw the KLCI’s resistance levels at 1,618, 1,650 and 1,680, and the support levels at 1,562 and 1,546.

Overall, Bursa Malaysia saw 9.19 billion shares worth RM5.35 billion traded. Gainers outpaced laggards by 760 to 479 while 432 counters remained unchanged.

Among KLCI constituent stocks, Petronas Chemicals Group Bhd led the pack, closing 9.35% or 60 sen higher at RM7.02. This was followed by Tenaga Nasional Bhd (TNB), which closed 7.74% or 78 sen higher at RM10.86, and Axiata Group Bhd, which was up 6.48% or 23 sen at RM3.78.

Banking heavyweights also closed in positive territory, including Hong Leong Bank Bhd (+4.19%), Malayan Banking Bhd (+3.67%), CIMB Group Holdings Bhd (+3.31%), Public Bank Bhd (+2.99%) and RHB Bank Bhd (+2.91%).

Across Asia, all leading indices closed in positive territory. China’s Shanghai Comp grew 1.77%, South Korea's Kospi rose 1.66%, Japan’s Nikkei 225 increased 1.34%, while Hong Kong’s Hang Seng was up 0.86%.

Other Asian share markets too began the new month with a bang, buoyed by the prospect of a Covid-19 vaccine fuelling a global economic recovery, buoyant Chinese factory activity and expectations of continuing fiscal and monetary support.

“What we are seeing today is that upward trend reasserting itself, given the positive news on the vaccine front, China’s growth picking up, and the tremendous faith in the ability of central banks to keep the markets afloat,” Reuters quoted Stephen Miller, market strategist for GSFM Funds Management, as saying.

S Kanagaraju