KLCI trails ACE Market rise as BOJ stimulus buoys world shares

KLCI trails ACE Market rise as BOJ stimulus buoys world shares
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KUALA LUMPUR (April 27): The FBM KLCI closed up 0.31 point or 0.02% at 1,369.85 today while Bursa Malaysia’s ACE Market index rose by a significantly larger quantum, as world equities responded to news that the Bank of Japan (BOJ) expanded monetary stimulus and pledged to buy an unlimited amount of bonds to mitigate the economic impact of the Covid-19 pandemic.

In Malaysia, analysts said the local stock market will take cue from the country’s Movement Control Order (MCO) and global crude oil prices. 

Across Bursa at 5pm, 5.18 billion shares were traded for RM2.24 billion across the exchange. There were 469 gainers and 369 decliners.

The ACE Market index closed up 138.95 points or 3.12% at 4,588.13 to be the largest percentage gainer across the exchange.

The KLCI ended up 0.31 point or 0.02% at 1,369.85 after rising to its intraday high at 1,378.40. At a glance, the KLCI pared gains at 5pm after a sharp drop in the final trading hour.

"The local market is likely to fall back into profit-taking consolidation mode this week, given the softening trend momentum following last week's correction after rallying to five-week highs. Sentiment-wise, with potential for further extension on top of the two-week extension on the MCO to May 12, more evidence of a sustained contraction in daily domestic Covid-19 infection rates and further oil price recovery from record lows will be crucial to extend (Malaysia shares’) recovery ahead,” TA Securities Holdings Bhd wrote in a note today.

Across Bursa, top gainers included Sinotop Holdings Bhd and Chemical Co of Malaysia Bhd. 

Leading decliners included KLCI stocks Petronas Dagangan Bhd and Tenaga Nasional Bhd.

Top decliner Petronas Dagangan closed down 56 sen or 2.76% at RM19.74.

Globally, it was reported that Asian shares bounced on Monday as the BOJ announced more stimulus steps to help cushion the economic impact of the coronavirus, but the recent weak run in the global oil price showed no signs of ending.

It was reported that to ease corporate funding strains, the BOJ said it will boost by three-fold the maximum amount of corporate bonds and commercial debt it buys to 20 trillion yen.

The central bank was also quoted as clarifying its commitment to buy unlimited amounts of government bonds by scrapping loose guidance to buy them at an annual pace of 80 trillion yen.

"The BOJ will purchase necessary amounts of government bonds without setting an upper limit" to keep long-term interest rates around its 0% target, Reuters quoted the BOJ’s statement as saying.