KLCI rides on Wall Street euphoria and domestic stimulus package to rise 1.31%

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KUALA LUMPUR (April 7): The FBM KLCI rose 1.31% in early trade Tuesday as key index-linked stocks jumped, riding on the overnight euphoria at Wall Street as well as positive vibes from the second government stimulus measures announced by Prime Minister Tan Sri Muhyiddin Yassin.  

At 9.05am, the FBM KLCI rose 17.94 points to 1,359.63.

The top gainers included Hong Leong Financial Group Bhd, KESM Industries Bhd, Petronas Dagangan Bhd, Malayan Banking Bhd, Petronas Gas Bhd, Hong Leong Bank Bhd, Public Bank Bhd, British American Tobacco (M) Bhd, LPI Capital Bhd and Aeon Credit Service (M) Bhd.

Bloomberg reported that Asian stocks looked set to build on a U.S. rally after the reported death tolls in some of the world’s coronavirus hot spots continued to show signs of easing. The yen maintained losses and Treasuries fell.

S&P 500 futures dipped at the open in Asia Tuesday after index finished up 7% and closed at its highest since March 13. Futures in Japan pointed to a strong open with Prime Minister Shinzo Abe expected to announce a month-long state of emergency as soon as Tuesday and details of a record stimulus package to combat the spread of the virus. Australian and Hong Kong futures also rose, it said.

Hong Leong IB Research said in the wake of the overnight Dow’s 7.7% surge coupled with the 2nd government stimulus measures to spur domestic ailing SMEs, KLCI could still advance further to retest 1353 (March 26 high) and 1364 (38.2% FR) territory.

“Nevertheless, we reiterate Sell Into Rally as we do not expect the formidable hurdles at 1369-1419 gap (March 16) to be filled in the near term, given the pandemic’s toll on the global economy although the latest fatality figures provided some relief to the onslaught of Covid-19.

“Conversely, a decisive breakdown below key support near 1329 (10D SMA) will acclerate further selling spree towards 1300 levels,” it said.

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