Market Close KLCI up 1.2% on Fed’s delay in stimulus cut

Market Close KLCI up 1.2% on Fed’s delay in stimulus cut
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Thursday, 19 September 2013 17:21

KUALA LUMPUR (Sept 19): The local stock market rose 1.2% at close of the trading day after the U.S. Federal Reserve surprised investors by deciding to keep its economic stimulus programme in place.

Asian and global markets have reacted positively to the news. Overnight, the Fed delayed the start of stimulus reduction, pending more evidence of solid economic growth. Fed chairman Ben Bernanke also refused to commit to any reduction this year.

At 5.00 pm market close, the benchmark BFM KLCI rose 21.51 points or 1.21% to end at 1792.91.

Most research houses, in their morning notes, said this was positive news for the stock market.

“With the large concern on the cut in quantitative easing out of the way, we predict the local market will continue to scale new highs… For now buy on rally is the best course of strategy,” said M& A Securities.

“The sky looks brighter now, though this also means the delay in trimming the stimulus programme,” said a senior research analyst.

In Asia, Japan’s Nikkei 228 rose 1.8% to 14766.18 at market close while Hong Kong’s Hang Seng Index finished up 1.7% at 23,502.5 points. Singapore’s Straits Times Index rose 1.8% to 3251.78.

In the local market, advancers beat decliners by 701 to 162, while 247 counters traded unchanged. Volume totalled 1.95 billion shares valued at some RM2.73 billion.

The top gainers were led by Aeon Credit, BAT, Petronas Dagangan, Petronas Gas, UMW, Focal, Naim, KLK and Genting.

The actives included Sona Petroleum, Flonic, IRCB, Astral Supreme, MAS, TH Heavy Engineering and Focal Aims.

The decliners were dominated by four major glove stocks -- Top Glove, Supermax, Kossan and Hartalega after the glove sector was downgraded by Alliance Research. The ringgit, which rose sharply on Fed news, has also a negative impact on glove makers.