Midday Market KLCI gains 1.06% on US Fed surprise

by **Cals** Thu 19 Sep 2013, 13:39

Midday Market KLCI gains 1.06% on US Fed surprise

Business & Markets 2013

Written by Surin Murugiah of theedgemalaysia.com

Thursday, 19 September 2013 12:52

KUALA LUMPUR (Sept 19): The FBM KLCI gained 1.06% at the midday break on Thursday, in line with most global markets after the US Federal Reserve chairman Ben Bernanke on Wednesday refused to commit to begin reducing the bond purchases this year, and instead went out of his way to stress the program was "not on a preset course".
At 12.30pm, the FBM KLCI gained 19 points to 1,790.40.
Advancers beat decliners by 570 to 162, while 225 counters traded unchanged. Volume was 1.08 billion shares valued at RM1.25 billion.
The top gainers included Aeon Credit, BAT, Petronas Dagangan, Petronas Gas, UMW, Cahya Mata Sarawak, Naim, KLK, Genting and Scientex.
The actives included Sona Petroleum, Flonic, IRCB, Astral Supreme, TH Heavy Engineering and Focal Aims.
The decliners included Top Glove, TGL, Narra, Supermax, Media Prima, TSR Capital, EIG and BHIC.
MIDF Research has maintained its 2013 year-end target for the FBM KLCI at 1,800 points and said the local market (as well as other regionals) is expected to react positively on the US Federal Reserve postponing the start of the wind down of its massive monetary stimulus, on grounds that it wanted to wait for more evidence of solid economic growth.
Nevertheless, MIDF Research head of equity Syed Muhammed Kifni said the overhanging worries over the eventual timing and pace of QE3 taper persist.
Commenting on the decision, Syed Muhammed in a note Thursday said the US economy was progressing “at a moderate pace” on the road to recovery
“However the US Fed is unsure on its sustainability. While most of the economic indicators are favorable, recent rise in longer-term interest rates is not supportive of the mortgage markets and is less accommodative to a stronger economic recovery,” he said.
Elsewhere, Asian shares and currencies surged across the board on Thursday after the Federal Reserve stunned markets and decided not to taper its asset-buying programme now, sending global bond yields and the dollar into a tailspin, according to Reuters.
From Jakarta to Manila, Tokyo to Sydney investors celebrated the prospect of prolonged stimulus in the world's largest economy. MSCI's broadest index of Asia-Pacific shares outside Japan jumped 2.2 percent to a four-month peak, it said.