KUALA LUMPUR (June 9): The FBM KLCI has risen 18.83 points or 1.21% to a four-and-a-half-month high at 1,575.16 points as the country’s short-term economic recovery plan and the recovery phase of the movement control order, which starts tomorrow, spurred investor optimism.
Today, the FBM KLCI only traded in positive territory, ranging between 1,567.97 to 1,590.83 points.
This means the benchmark index has surged 29.14% since the low of 1,219.72 points on March 19 this year. Year-to-date (YTD), the FBM KLCI was down only 0.86% — nearly erasing all its losses seen this year.
Malacca Securities Sdn Bhd analyst Kenneth Leong told theedgemarkets.com that the FBM KLCI resumed trading from the extended weekend break on a buoyant manner as the key index is playing catch-up with gains across global equities.
“Market sentiment was also supported by the slew of measures announced under the Short Term Economic Recovery Plan that aims to support the growth of the economy from June 2020 to December 2020,” he added.
Despite the strong performance today, Leong said further upsides will be increasingly difficult to come by, amid the lofty valuations following the recent recovery. “For now, we see the 1,600 level serves as a strong resistance while the support is set at the 1,530 level.”
Based on the high of 1,590 level this morning — attributable to investor optimism from the recovery movement control order — TA Securities Holdings Bhd technical analyst Stephen Soo said the market was seeing a discount due to profit taking by investors.
As the market has been “overheated”, Soo opined that the market should see a pause moving forward as investors take their cues from the earnings results that are still being released as well as the World Health Organisation (WHO) warning that the Covid-19 situation is worsening worldwide.
He noted that support level will be at 1,550 and 1,520 points, while the resistance level will be at 1,590, 1,600 and 1,620 points.
Two-thirds of the KLCI constituents made gains today. Among the 30 constituents, Malaysia Airports Holdings Bhd led the gainers with a strong 10.91% or 60 sen rise to close at RM6.10 today, followed by Genting Bhd, which rose 8.66% or 38 sen to close at RM4.77, and AMMB Holding Bhd, which was up 4.94% or 16 sen to settle at RM3.40.
Notably, shares of glove makers also continue to be well supported, following the warning of WHO on the worsening Covid-19 situation worldwide. Top Glove Corp Bhd rose 62 sen or 3.79% to RM17, while Hartalega Holdings Bhd was up 32 sen or 2.62% at RM12.52.
Today, Bursa Malaysia saw 9.1 billion shares worth RM6.21 billion traded. Gainers led losers by 779 to 328, while 403 counters remained unchanged.
Clearly, the KLCI is the best performing index among the Asean markets today. Across Asia, Japan's Nikkei 225 slid 0.38%, while South Korea's Kospi grew 0.21% and Hong Kong’s Hang Seng was up 1.13%.
YTD, China’s Shenzhen Composite index was up 8.5%, followed by Kospi, which was down only 0.4%, while the KLCI was the third best performer. Closer to home, Singapore’s Straits Times Index was down 13.5% since the beginning of this year.
Reuters reported that Asian stocks extended their winning streak for the ninth consecutive session on Tuesday and oil prices rose as the lifting of coronavirus lockdowns in many countries made investors hopeful for a relatively quick global economic recovery.
Global markets were battered in March due to investor anxiety over the impact of the short- and longer-term damage to the world economy from the pandemic. But most indices are now back to pre-Covid-19 levels, the newswire reported.