Bursa rallies as contagion risk subsides

KUALA LUMPUR: The domestic market is hot on the heels of global markets as fears over contagion risks in the banking sector eased, with the focus on the US Federal Reserve's next move at the upcoming Federal Open Market Committee meeting.

At the opening bell, the benchmark FBM KLCI was up 5.35 points to 1,407.16, tracking a bounce in US markets overnight as investors gained confidence the takeover of beleaguered Credit Suisse by rival UBS will help to prevent a growing banking crisis.

On Wednesday, the Fed will decide if it will continue with its ongoing rate hike path and to what degree, given the new developments in the banking sector.

"We believe the local bourse will remain sideways until more clues are given after the conclusion of the FOMC meeting," said Malacca Securities Research in a note.

Reading the technical price chart, the research firm noted that the FBM KLCI closed above the 1,400-points level in the previous session despite a loss.

"Technical indicators could be positive biased as the MACD Histogram turned higher despite hovering in the negative region, while the RSI is above 30.

"Resistance is located around 1,420-1,430, while the support is pegged along 1,370-1,380," it added.

Domestic bank stocks led the rebound on the blue-chip index, with Maybank gaining eight sen to RM8.42, Public Bank rising four sen to RM3.99, CIMB adding five sen to RM5.20 and Hong Leong Bank climbing 12 sen to RM20.22.

Press Metal was up four sen to RM4.82, IHH added six sne to RM5.90 and PETRONAS Gas rose 16 sne to RM16.60.

Gold merchants were seen retreating as investors took profit from the safe-haven counters. Tomei fell six sen to RM1.18 while Poh Kong shed 4.5 sen to 93 sen.

Among actives, Hong Seng was flat at 14 sen, Velesto rose one sen to 20 sen and MBSB added one sen to 65.5 sen.

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