KUALA LUMPUR: Bursa Malaysia continued its uptrend with the benchmark index closing above 1,600 today, thanks to optimistic investors and optimism of a global interest rate cut.
At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 0.52 per cent or 8.29 points to 1,605.68 from Monday's close of 1,597.39.
The broader market was positive with gainers leading losers 684 to 455 while 498 counters were unchanged.
The benchmark index, which opened 3.46 points higher at 1,600.85, fluctuated between 1,600.66 in the early session and reached a high of 1,610.32 during the afternoon session.
On the other hand, Malaysian stocks hit RM2 trillion in market capitalisation for the first time ever on Tuesday thanks to broad gains in blue chip stocks and a slew of new listings.
The benchmark index FBM KLCI rallied for its fourth straight days to 1,605.68, its highest close since April 8, 2022, led by consumer and banking stocks.
So far this year, the KLCI has racked up over 10 per cent gains.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng maintains an optimistic view on the local stock market, supported by appealing valuations and ongoing foreign investment, while acknowledging the potential for profit-taking.
He believes that if the benchmark index can stay above the 1,600 level over an extended period, there will be further upside potential.
He noted that based on the current upward trend, the firm's target for 2024 is 1,660 points.
Thong said this can be easily achieved as the local stock market remains at reasonable prices at the current price-earnings (PE) ratio of 15 times compared to the average of 16 times.
"As such, we raise our weekly FBM KLCI target to 1,600-1,620, with immediate resistance at 1,620 and support at 1,600, followed by 1,570," he told the Business Times.
Meanwhile, Thong said most key regional indices trended mostly higher, fuelled by persistent optimism regarding the likelihood of a US interest rate decrease.
Notably, he said indices in Japan and South Korea outperformed their counterparts in catch-up trade.
He added that Hong Kong closed in negative territory due to profit-taking activities following the recent rally.