Malaysian shares extend gains on oil, ringgit

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KUALA LUMPUR (Oct 7): The FBM KLCI rose 26.74 points or 1.61% as crude oil prices recovered above US$50 a barrel and as the ringgit gained as much as 4.5% versus the US dollar.

The ringgit appreciated amid a stop-loss selling of the US dollar. At 5pm, the KLCI closed at 1,689.25 points, lifted by oil and gas and banking stocks such as SapuraKencana Petroleum Bhd and CIMB Group Holdings Bhd.

Jupiter Securities Sdn Bhd chief market strategist Benny Lee said the "strengthening of the ringgit and higher oil prices have boosted market confidence".

"As we are in last quarter now, we expect there will be window dressing. This is coupled with the expectation of the RM20 billion injection into ValueCap to boost the market," Lee told theedgemarkets.com.

The KLCI extended gains after rising 14.92 points or 0.91% yesterday to 1,662.51.

In currency markets today, the ringgit appreciated to its strongest point versus the US dollar at 4.1745, Bloomberg data showed. Yesterday, the exchange rate closed at 4.3710.

Today, Bloomberg reported that the ringgit strengthened the most since 1998 as Malaysia reported its biggest trade surplus in nine months and as crude oil prices climbed

Reuters reported that oil prices rose on Wednesday after data showed the US market was beginning to tighten, with falling supply and lower inventories after two years of heavy surplus.

The ringgit tracks crude oil prices as the commodity forms a crucial component of the Malaysian economy and government revenue.

Bursa Malaysia saw 2.69 billion shares worth RM3.21 billion traded. The bourse saw 699 gainers outnumbering 223 decliners.

The top gainer was British American Tobacco (M) Bhd while the top decliner was Hang Seng-linked put warrant HSI-HD. Bursa Malaysia's most-active stock was KNM Group Bhd.

Across Asian markets, Hong Kong's Hang Seng increased 3.13%, South Korea's Kospi rose 0.76% while Japan Nikkei 225 rose 0.75%.

Reuters reported that a recovery in oil prices spread to stock markets and emerging market currencies on Wednesday, with the prospect of more support from the world's central banks offsetting more disappointing economic data.

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