KUALA LUMPUR: The FBM KLCI extended its rally as an end to the war in Iran came within reach, sparking a retreat in oil prices and a surge in global equities.
Negotiations between the US and Iran have led to a peace proposal by the US, which Iran is expected to respond to by Thursday.
US equities markets exploded higher following the overnight announcement, with the Nasdaq climbing 2.02% and the S&P500, 1.46%, to fresh record levels.
Brent crude futures for July delivery dove below the US$100 a barrel mark on the latest development, but bounced back to hover near US$102 a barrel.
On Bursa Malaysia, the benchmark FBM KLCI jumped 5.95 points to 1,762.81, just over eight points short of the pre-war peak recorded on Jan 27 this year.
Blue-chip banks drove the index higher, with CIMB jumping 17 sen to RM8.10, Maybank rising 12 sen to RM11.34, Public Bank adding five sen to RM4.84, AMMB gaining eight sen to RM6.47, RHB climbing seven sen to MR8.34 and Hong Leong Bank surging 42 sen to RM22.54.
Consumer heavyweight Nestle leapt RM2.30 to RM103.20, while aluminium manufacturer Press Metal
climbed 11 sen to RM8.93.
PETRONAS Chemicals, which had been a beneficiary of the higher crude oil prices, slid 19 sen to RM5.68.
Amid the euphoria of a potential conclusion to hostilities in the Middle East, Apex Securities warned volatility is likely to persist as US President Donald Trump has warned of intensifying military action should Iran not accept the peace deal.
"Overall, the FBM KLCI is expected to remain supported in the near term, although market sentiment will continue to track geopolitical developments, oil price movements and earnings sustainability," it said.
On the technical charts, the research firm said the FBM KLCI has staged a breakout above its symmetrical triangle formation, which signals further upside towards 1,777 and confirms the continuation of a broader uptrend following a three-month consolidation phase.
