Friday 29 Mar 2024
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KUALA LUMPUR (Feb 25): Malaysian shares may today track overnight US market gains on expectation that US policy makers could raise interest rates later than expected.

US lending rate hikes will expedite fund flows back into US-based assets from emerging Asian markets like Malaysia. As such, a later-than-expected US rate hike could direct investors' attention to Asian assets for now to capitalise on higher rates in the region.

Yesterday, Malaysia's FBM KLCI rose 9.29 points or 0.51% to close at 1,818.68.

In the US, the Dow Jones Industrial Average rose 0.51% in overnight trade, S&P 500 added 0.28% while Nasdaq Composite climbed 0.14%.

Reuters reported that U.S. stocks closed higher on Tuesday, with the Dow and S&P 500 hitting records, as investors attempted to interpret a subtle change in emphasis in testimony by Federal Reserve Chair Janet Yellen.

Yellen told a congressional committee that the Fed is preparing to consider increases "on a meeting-by-meeting basis." While economists have been expecting a hike as soon as June, some investors saw Yellen's comments as an indicator of a later liftoff for the Fed's first rate hike since 2006.

In Malaysia, AllianceDBS Research Sdn Bhd analyst Teoh Chang Yeow wrote in a note that the KLCI's buying momentum yesterday was stronger than selling. "As such, FBMKLCI would likely trade above the 1,819.24 level on 25 Feb 2015.

"A crossover of 1,818 again should see the market gearing towards the recent high of 1,831
(4 Feb 2015)," Teoh said.

Lower crude oil prices on supply concerns will also be closely watched as the commodity constitutes a major portion of the Malaysian economy.

Cheaper oil may direct the spotlight on the ringgit besides actively-traded oil and gas-related stocks like KNM Group Bhd and Perisai Petroleum Teknologi Bhd.
 
Reuters reported that Brent April crude fell 24 cents to settle at US$58.66 a barrel, after reaching US$60.30. U.S. April crude fell 17 cents to settle at US$49.28, off a US$50.33 intraday peak.

 

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