KUALA LUMPUR (June 3): The FBM KLCI gained 7.8 points or 0.45% on bargain hunting, and as investors bought plantation shares to capitalise on the potential rise in crude palm oil (CPO) prices.
At 5pm, the KLCI closed at 1,749.17 as plantation shares like Kuala Lumpur Kepong Bhd and Sime Darby Bhd rose among Bursa Malaysia top gainers.
"Plantation stocks had led today’s climb, as CPO prices had rapidly rebounded. However, it is unclear whether the rebound in CPO prices will be sustained going forward," Inter Pacific Securities Sdn Bhd research head Pong Teng Siew told theedgemarkets.com.
Earlier today, Public Investment Bank Bhd analyst Chong Hoe Leong wrote in a note that the research firm expected CPO prices to rise to between RM2,400 and RM2,450 a tonne in the second half of this year.
The forecast took into account higher CPO exports and "potential strength of the El Nino (weather) development".
"We believe the current CPO price has hit the bottom and further downside is unlikely," Chong said.
At the 5pm market close, Pong also said the KLCI had rebounded on bargain hunting after declining for the past few days.
Yesterday, the KLCI fell 2.04 points or 0.12%.
Today, Pong said: “The index has fallen over the past few days, and is now rebounding due to bargain hunting by local investors."
Across the exchange, 1.48 billion shares worth RM1.99 billion were traded. Gainers beat decliners at 444 against 358, while 307 counters were unchanged.
Leading decliners included Dutch Lady Milk Industries Bhd and CIMB Group Holdings Bhd. The counter with the highest number of trades was Nexgram Holdings Bhd.
In currency markets, the ringgit strengthened to 3.6850 against the US dollar.
Reuters reported that Asian currencies rose broadly as the dollar lost some momentum. Hopes for progress in Greek debt talks and a huge spike in European yields had triggered a 2% jump in the euro on Tuesday, knocking the dollar lower.
Across Asian share markets, Japan’s Nikkei declined 0.34%, South Korea’s Kospi fell 0.74%, while Hong Kong’s Hang Seng gained 0.69%.
Reuters reported that a spike in US and German debt yields reduced the appetite for riskier assets to keep Asian share markets subdued on Wednesday, while the euro held gains made on upbeat euro zone inflation data and on hopes that Greece will reach a deal with creditors.