Malaysian shares, ringgit gain on better oil prices

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KUALA LUMPUR (Oct 9): The FBM KLCI rose 14.34 points or 0.85% while the ringgit strengthened significantly, helped by higher crude oil prices and anticipation that the US could postpone its interest rate hike.

At 5pm, the KLCI closed at 1,706.54, driven by oil and gas counters like SapuraKencana Petroleum Bhd and Petronas Chemicals Group Bhd.

Areca Capital Sdn Bhd chief executive officer Danny Wong said, "Improved crude oil prices is the key factor that boosted the local market today."

"For the past two days, we can see foreign fund inflow in the local market. The inflow will continue if oil prices continue to go up," Wong told theedgemarkets.com.

Today, Brent crude oil prices rose to US$53.47 per barrel as at 4.34pm. The ringgit, which tracks crude oil prices, strengthened to 4.1295 against the US dollar at 4.59pm.

Earlier, the exchange rate reached its strongest intraday point at 4.0802. Yesterday, the exchange rate closed at 4.2355.

Today, crude oil, currency and share markets took the cue from investors' expectation on the timing of US interest rate hikes.

Wong noted that the US Federal Reserve (Fed)'s meeting minutes, which hinted that a rate hike was unlikely to happen this year, had given more clarity to the market.

Such sentiment supported Asian shares. Japan's Nikkei 225 rose 1.64%, while Hong Kong's Hang Seng increased 0.46%. South Korean markets were closed for holiday today.

Reuters reported that Asian shares rose on Friday, taking their cue from the jump in oil prices and Wall Street gains after minutes of the Fed's latest meeting damped down expectations of an imminent Fed rate hike

The Fed minutes revealed the extent to which policymakers are concerned that a global economic slowdown might threaten the US economic outlook. Though they said overseas turmoil had not "materially altered" economic prospects, they opted to hold interest rates steady last month.

Bursa Malaysia ended with more gainers. There were 567 gainers against 305 decliners while 335 counters were unchanged.

The bourse saw 2.46 billion shares worth RM2.84 billion traded.

The top gainer was British American Tobacco (M) Bhd, while the top decliner was Panasonic Manufacturing Malaysia Bhd. The most-active counter was KNM Group Bhd.

This Monday, Malaysia's Statistics Department will announce the country' industrial output numbers. Next week will also see the Malaysian Palm Oil Board announcing the oil palm sector's production and inventory figures.

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