KLCI rises 0.38% in line with regional gains

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KUALA LUMPUR (Dec 19): The FBM KLCI rose 0.38% in early trade in line with regional gains, lifted by select blue chips including index-linked banking stocks.

At 9am, the FBM KLCI rose 6.52 points to 1,706.47.

The top gainers included British American Tobacco (M) Bhd, Genting Plantations Bhd, Carlsberg Brewery (M) Bhd, Hong Leong Financial Group Bhd, Guiness Anchor Bhd, Public Bank Bhd, Inari Amertron Bhd, AMMB Holdings Bhd, Malayan Banking Bhd and Press Metal Bhd.

Japanese stocks led Asian markets higher on Friday, after Wall Street boasted its biggest two-day advance since late 2011 amid relief the Federal Reserve was in no rush to start hiking interest rates, according to Reuters.

The gains came even as oil stayed under pressure, suggesting equity investors were beginning to see the positives in lower fuel costs and increased consumer spending power, it said.

M & A Securities research head Rosnani Rasul in a markte preview Friday said Wall Street had another ball yesterday, continuing the adrenalin rush pumped up by the Fed’s bright economic outlook and patience stance in policy strategy.

She said that this time it was added by the improving confidence originating from the Europe following the Swiss National Bank surprise policy decision. 

Rosnani said most investors took this as a cue for fresh new quantitative easing measures by the EU.

Bolstered by that, she said the S&P 500 and DJIA added a whopping 48.34 (2.40%) and 421.28 (2.43%) points to end at 2,061.23 and 17,778.15 respectively, fast closing their gap against the year high of 2,075 and 17,958 level.

Rosnani said the booster to the market confidence came from the negative deposit rate of 0.25% as announced by the Swiss National Bank, essentially penalizing money that sits idle in the bank.

“The central bank said the move is aimed at lowering the three-month LIBOR below zero and European investors viewed the announcement as a prelude to a sovereign QE program from the European Central Bank.

“The world could finally see a lifeline given to the EU following a spate of unfortunate negative catalyst from high unemployment level, lethargic inflation and a series of economic downgrades over the years.

“This will almost certainly help to elevate risk taking and tolerance in local and regional market today,” she said.