Bursa Malaysia & FBM KLCI Intent on New Highs as Rate-Cut Hopes Rise

The Bursa Malaysia concluded the trading week with notable gains, buoyed by the positive sentiment that permeated regional markets. Investors' expectations are increasingly tilting towards a potential interest rate cut by the U.S. Federal Reserve next month, a move that is seen as favourable for emerging market assets.

The FTSE Bursa Malaysia KLCI (FBM KLCI) climbed by 1.53 percent, up 25.25 points to close at 1,678.80, from its previous closing of 1,653.55. this pushes the index up to 52 week high range, and has continued the bullish sentiment that has been building in recent weeks.

With such a bullish trend, the momentum has pushed the FBM KLCI above its 20-day and 50-day exponential moving average (EMA) lines. Some of the notable gainers on the blue-chip Malaysian index today include YTL Power Corporation Berhad, YTL Corporation Berhad, Nestle (Malaysia) Berhad, and Tenaga Nasional Berhad which all saw gains in excess of 5%.

At the other end of the scale was Press Metal Aluminium Holdings Berhad which saw a 3.5% decline on what was broadly a positive day. Of the 30 stocks on the FBM KLCI, there were 8 in the red, 1 neutral, and 21 gainers on the day.

The current outlook suggests a predominantly positive trend so long as the index sustains above some of the major support levels. Whilst the index in is uncharted territory, the next psychologically important level to the upside remains the round 1,700 level. On the downside, 1,650 could act as a battleground if there is a bearish move in the upcoming week.

Traders and investors are expected to keep a close watch on global economic cues, particularly signals from the U.S. regarding interest rates, which could have an impact the direction of the Malaysian market. With the labour day weekend coming in the US, with their stock markets closed on Monday, the long US weekend may mean a quieter news upcoming Monday than usual.