PETALING JAYA: Fresh hopes of Covid-19 vaccine, Malaysia’s first factory activity expansion in 21 months and positive sentiment across the regional market boosted optimism in the local stock market, lifting the bellwether index for the fourth consecutive trading day.
A total of 25 constituent stocks out of the 30-stock FBM KLCI closed in the green as the index delivered its best performance in nearly a month. Similarly, across the larger Bursa Malaysia, market breadth was overwhelmingly positive as 701 gainers trumped 334 decliners.
The stronger FBM KLCI, which rose by 21.85 points or 1.44% to close at 1,536.28 points, tracked the earlier gains seen in the United States’ S&P500 and Nasdaq, despite a slight decline in the Dow Jones Industrial Index. All key stock market indices in Asia also ended positively yesterday, boosted by the higher Dow Jones, S&P500 and Nasdaq futures.
At a time when the fear of a second wave of coronavirus infections remains elevated, with several countries already witnessing a spike in new cases, the announcement by pharmaceutical giant Pfizer that the vaccine being developed with German biotech firm BioNTech seems to be well-tolerated in early-stage human trials helped to allay investor anxiety.
While the finding has yet to be reviewed by a medical journal, it is an indication that the world is moving closer to finding the first vaccine for Covid-19.
In addition, the confidence that the domestic economy is already on its path of recovery, as witnessed in the rise of Malaysia’s Purchasing Managers’ Index (PMI) – into the expansion territory of above 50 – amplified further investor sentiment in the local bourse.It is worth noting that the country’s PMI, compiled by IHS Markit, rose to 51 index points in June or the highest since September 2018, as compared to 45.6 in May.
The index, which is an important indicator of manufacturing performance, indicates an improvement in the health of Malaysia’s goods-producing sector and stronger economic growth more generally.
The broad-based positive stock movement yesterday helped all indices, except for three, to close in the green.
The exceptions were the energy, construction and real estate investment trust indices.
The healthcare index was the best performer, rising by 2.41% – above the FBM KLCI’s increase. This was mainly due to the gains from glovemakers.
Supermax was also the second biggest gainer on Bursa Malaysia yesterday, below Nestle Malaysia Bhd.
Across Asia, Hong Kong’s Hang Seng index posted the sharpest rise of 2.85% among other key stock exchange indices in the region.
Japan’s Nikkei 225 rose 0.11%, China’s Shanghai Composite Index added 2.13%, Singapore’s Straits Times Index gained 1.78% and Indonesia’s Jakarta Composite Index rose 1.07%.
Did you find this article insightful?
100% readers found this article insightful