Midday Market Profit-taking curbs KLCI advance

Midday Market Profit-taking curbs KLCI advance
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Wednesday, 27 March 2013 12:54


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KUALA LUMPUR (Mar 27): The FBM KLCI extended gains, rising as much 1% before profit taking curbed the benchmark's advance at lunch break.

At 12.30pm, the KLCI rose 13.44 points or 0.8% to settle at 1,666.27, helped by financial institutions like CIMB Group Holdings Bhd and MALAYAN BANKING BHD [].

The index had earlier jumped as much as 17.02 points to an intraday high of 1,669.85. Today’s gains followed the KLCI's cumulative 26-point rise last two days.

Across Bursa Malaysia today, about 469 million shares worth RM944 million changed hands. There were 356 gainers versus 219 decliners.

The top gainer was BRITISH AMERICAN TOBACCO (M) [] Bhd while the leading decliner was Fraser & Neave Holdings Bhd. The most-active stock was TEBRAU TEGUH BHD []

Hong Leong Investment Bank Bhd research head Low Yee Huap said the KLCI is trading on positive technical dynamics after the benchmark pierced a crucial resistance level at 1,650 points yesterday.

That, in turn, prompted expectations that the KLCI will test higher levels on sustained buying momentum amid positive global economic data and domestic pre-election sentiment.

"A strong and sustainable breakout above 1,664 will notably enhance our confidence of a new rally ahead, probably to retest further resistance at 1,674 and more formidable resistance near all-time high of 1,699.7 registered on Jan 4," Low said.

The rise in the benchmark will be closely watched amid cautious investor sentiment ahead of the dissolution of the Negeri Sembilan State Assembly tomorrow (March 28).

This is to make way for the nation's 13th general election which must be held by end-April.

Many cautious and risk-averse investors have scaled down their holdings in the local market as they wait for the Malaysian Prime Minister to announce the dissolution of Parliament.

Across the region, Reuters reported that Asian shares rose on Wednesday as positive U.S. data pointing to a moderate recovery in the economy offered comfort, while the euro eased on worries over the consequences of the Cyprus bank bailout deal which inflicts huge losses on wealthier depositors.

The MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5 percent to a one-week high.

Australian shares added 0.6 percent led by blue chip miners on strong resource prices and solid U.S. stock performances. Chinese shares were also higher and Southeast Asian bourses saw inflows continuing.

Japan's Nikkei stock average was nearly flat in choppy trading after many shares went ex-dividend, offsetting the boost to sentiment from Wall Street's data-led gains.