RCEP adds to bullish market momentum

  • Markets
  • Monday, 16 Nov 2020

KUALA LUMPUR: The domestic market continued its rally on Monday as the signing of a China-led regional trade pact shored up the positive sentiment over a recovering global economy.

The signing of the Regional Comprehensive Economic Programme (RCEP) on Sunday was a boon to trade relations in the region as investors seek out recovery plays on news of the discovery of a Covid-19 vaccine.

Financial stocks have been the subject of heavy buying in recent days, and making the biggest contribution to the FBM KLCI's advance.

On Monday, Public Bank gained 38 sen to RM18.13, Hong Leong Bank rose 36 sen to RM16.70, CIMB climbed 19 sen to RM3.63, RHB added 18 sne to RM5.12 and Maybank added 11 sen to RM8.04.

This offset the losses seen in Petronas Chemicals, falling eight sen to RM6.70, Tenaga dropping 22 sen to RM11.10, Top Glove losing 29 sen to RM7.49 and Hartalega sliding 86 sen to RM14.52.

Glove stocks have been among the biggest losers on the heavyweight index amid concerns over shrinking demand now that a Covid-19 vaccine is entering the market.

At 12.30pm, the FBM KLCI was up 4.76 points to 1,594.45. Trading volume jumped to 10 billion shares valued at RM3.59bil.

"Technically speaking, following last fortnight’s surge of 122.8 points or 8.4% which then vaulted the benchmark index to above the 50-day SMA line, the FBMKLCI is currently riding a positive momentum," said Kenanga Research in its technical outlook.

"While the index’s upward bias may persist, its further progress could be blocked by a descending trendline that stretches back to February 2019 and the recent appearance of two hanging man candlesticks (which are reversal pattern indicators) on the chart.

"We reckon the key market barometer will probably face stiff challenges at our revised resistance hurdles of 1,600 and 1,645 with our adjusted resistance-turned-support thresholds now pegged at 1,550 (S1) and 1,510 (S2)," it added.

On the broader market, lower liners have seen a surge of buying interest, led in recent days by AT Systemization.

The counter was the top traded on Monday, rising one sen to 26.5 sen on the back of 159.86 million shares.

Meanwhile, runner-ups on the actives list were Metronic gaining 2.5 sen to 19.5 sen while Nexgram rose 0.5 sen to 6.5 sen.

In Asian markets, equities were spurred on by the prospect of a global recovery and as the transition of power in the US inched closer to fruition.

Japan's Nikkei rose 1.9% while China's composite index gained 1% and Hong Kong's Hang Seng gained 0.4%. South Korea's Kospi was up 1.8% and Australia's ASX200 added 1.2%.

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Bursa Malaysia , FBM KLCI , equities


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