KLCI posts 11th hour gains after volatile trade

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KUALA LUMPUR (May 25): The FBM KLCI jumped in the final trading minutes to close 5.12 points or 0.3% higher on crude oil gains as investors continued to exercise caution over a potential US interest rate hike.

Higher US interest rates do not bode well for emerging Asian markets in anticipation that investors will shift their funds to US dollar-based assets.

At 5pm, the KCLI closed at 1,630.96 points on gains in stocks including Petronas Gas Bhd, which was the second-largest gainer across Bursa Malaysia.

Reuters reported that US oil climbed 71 US cents to US$49.33 (RM202.36) a barrel by 0652 GMT, while Brent oil rose 65 US cents to US$49.26. It was reported that oil futures pushed closer to US$50 a barrel on Wednesday, with US crude hitting its highest in over seven months after industry data suggested a larger-than-expected drawdown in US crude inventories last week.

Oil markets were also supported by an overnight surge in US equities and strong home sales that could point to the Federal Reserve (Fed) raising interest rates as early as June.

In Malaysia, Kenanga Investment Bank Bhd research head Chan Ken Yew told theedgemarkets.com that investors took a more cautious approach on US interest rate hike concerns.

Such sentiment could have resulted in the KLCI vacillating between gains and losses within an intraday range of between 1,631.12 and 1,623.58 points.

Chan said: "From here, we reaffirm our view that the FBM KLCI is likely to trade downside-bias towards 1,600 this week while investors anxiously await speeches from US Fed policymakers (including Fed Chair Janet Yellen) at a panel event hosted by Harvard University this Friday, to seek more clues on the interest rate manoeuvres."

Across Bursa Malaysia today, share volume was 1.73 billion valued at RM1.8 billion. There were 302 gainers and 510 decliners.

Top gainer was Nestle (M) Bhd while leading decliner was Petron Malaysia Refining & Marketing Bhd. Top-active counter was AirAsia X Bhd.