KLCI cuts gains after rising above 1,700pts on crude oil

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KUALA LUMPUR (Aug 16): The FBM KLCI rose 9.56 points or 0.6% as crude oil prices gained on speculation of a production cut by Organization of Petroleum Exporting Countries (OPEC) members.

At 5pm, the KLCI closed at 1,699.89 points after rising to its intraday high of 1,700.71. The KLCI continued its climb after gaining 6.18 points yesterday (Aug 15).

Today, Areca Capital Sdn Bhd chief executive officer Danny Wong said the KLCI's rise was supported by foreign buying amid the rise in crude oil prices.

"Foreign funds have been consistently buying, as Malaysia, along with the other emerging markets, appear to be attractive now. Crude oil prices had recently rebounded, and the latest US data indicated that an increase in US interest rate is rather slim.

"The ringgit has also strengthened, and crude palm oil prices are also up, trading at around RM2,600 per tonne. All these factors have lent (support) to the better sentiment on Malaysia, contributing to the rise in the index (KLCI)," Wong told theedgemarkets.com.

According to Bloomberg data, the ringgit strengthened to 3.9878 against the US dollar after trading between 3.9840 and 4.0095 today. Brent oil rose to US$48.38 (RM192.92) per barrel while US oil gained to US$45.84.

The ringgit tracks crude oil prices as the commodity forms a crucial portion of the Malaysian economy.

Bursa Malaysia saw 2.83 billion shares worth RM2.45 billion traded. Gainers outnumbered decliners at 512 against 382 respectively.

Leading gainer was British American Tobacco (Malaysia) Bhd while Nestle (Malaysia) Bhd headed decliners. Top-active stocks included oil and gas-related counters like Sumatec Resources Bhd and TH Heavy Engineering Bhd.