Banking stocks fuel market's 2-year high
0 Comments| New Straits Times, Mar 9, 2010 | by Adeline Paul Raj
AN UNEXPECTEDLY strong stock market rally led by banks yesterday lifted the key index to a two-year high, boosting sentiment and raising expectations that the market will remain bullish over the near term.
"Ample liquidity, low interest rates and news flow about the global economic recovery gathering momentum - these will keep the market on an uptrend, but it won't be without volatility," said Lim Chee Sing, head of research at RHB Research.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index broke a major psychological resistance of 1,300 points convincingly right at the start of trade yesterday, led by strong gains in banks.
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The index ended the day 1.9 per cent, or 24.44 points, higher at 1,324.22, its highest close since March 3 2008.
It was the best-performing market in the Asia-Pacific, after that of Japan and Hong Kong.
Volume was strong with about 1.2 billion shares changing hands, some 30 per cent higher than the three-month daily average volumes.
"It's definitely a bullish breakout. The key thing now is to watch if volumes still stay strong and if stocks that were pumped up (yesterday), like banks, suffer from strong profit-taking over the next few days," said a technical analyst at RHB Research.
He sees the next resistance level for the index at 1,355 points in the medium term, with support at 1,300.
Local and foreign funds swooped in on Public Bank Bhd, CIMB Group Holdings Bhd and Malayan Banking Bhd (Maybank) on hopes that they would benefit from...