Bursa jumps as Fed's optimistic remarks send global equities higher

KUALA LUMPUR: The domestic market was lifted for a global rally induced by the Federal Reserve's remark overnight that the "disinflationary process has started".

The central bank sounded a more optimistic tone as it raised the lending rate by another quarter percentage point, although it cautioned that it was premature to declare victory over its war with inflation.

Overnight, the Dow Jones reversed intraday losses to end on a slight gain while the Nasdaq surged 2% as investors continued to find bargains in battered-down tech stocks.

"The quarter-point rate hike from the Fed is within the market’s expectation and it has reversed the negative mood on Wall Street to close in the positive zone; this might be suggesting that the market has priced in the interest rate impact and acknowledging that the inflationary pressure has been easing," said Malacca Securities Research in its daily market commentary.

On the local front, the research firm expects the technology sector to gain momentum following the strong surge on Wall Street.

However, it added that investors may take a breather on energy stocks given the pullback in Brent oil price and remain focused on sectors such as travel, transport and consumer.

Meanwhile, TA Securities Research in its own note said there was an absence of catalysts to spur buying interest in local equities beyond the short-term.

"The local market should drift sideways to lower amid lacking catalysts to lift stocks from current consolidation, and look at key external leads for guidance on the near-term direction," it said.

It added that the chart support remained at 1,460 and 1,450 with strong supports at 1,420 and 1,400.

It noted that "significant resistance" remained at 1,512 with the August high near 1,528 as strong resistan resistance. This is followed by 1,500 and 1,570 as tougher upside hurdles.

At the opening bell, the FBM KLCI was lifted 3.32 points to 1,488.82, spurred on by the growing positive sentiment and bargain-hunting as investors had taken to the sidelines ahead of the Fed policy meeting.

The Bursa Malaysia Technology index rose nearly 2% to 68.84 as it tracked the Nasdaq's strong performance.

The sector's leading counters included MPI up 30 sen to RM33.48, Vitrox rising 26 sen to RM8.10, KESM climbing 22 sen to RM7.52 and Pentamaster adding 19 sen to RM5.02.

Simultaneously, there was a further advance in consumer counters, which have benefited the most in the recent weeks from China's reopening theme and the year-end festive period.

Heineken jumped 92 sen to RM28.92 and Carlsberg rose 44 sen to RM23.98 while Nestle added 30 sen to RM33.48.

Among top actives, Hong Seng gained 1.5 sen to 21.5 sen, Sapura Energy was flat at five sen and CTOS fell one sen to RM1.53.

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