KUALA LUMPUR: Bursa Malaysia's benchmark index hit the highest level in almost four years on Monday, driven by the country's strong gross domestic product (GDP) in the second quarter (Q2) and January-July trade figures.
The ringgit, meanwhile, rose 1.31 per cent against the US dollar in early trade on Monday, hitting its strongest level since mid-February 2023.
At 12.30 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) was up 1.10 per cent or 17.83 points to 1,641.73 from Friday's close of 1,623.90.
By 3.30pm, the 30-stock index breached the 1,650 mark to reach new highs last seen in December 2020 as investors pushed banking stocks higher to dominate the top gainers board.
As at 3.26pm, the FBM KLCI hit a high of 1,653.35 points for the day. Six out of 10 of the top gainers were banks.
The index closed the day 24.80 points higher to 1,648.70.
Earlier, the FBM KLCI began the day 1.24 points higher at 1,625.14 and fluctuated between 1,624.58 and 1,644.08 during the morning session.
On the broader market, gainers led losers 548 to 449, with 435 counters unchanged.
Turnover reached 2.29 billion units valued at RM1.79 million.
Malaysia reported that the economy grew 5.9 per cent in Q2 2024 last week, and a 12 per cent jump in July trade figures earlier today.
Malacca Securities Sdn Bhd said the market bellwether was likely to continue its upward momentum following the release of strong Malaysia GDP data last week, especially with improved sentiment in the second half of 2024.
Additionally, the firm expects the consumer and shipping sectors to benefit from the stronger ringgit.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the FBM KLCI closed on a weekly high supported by persistent buying from foreign funds.
Thong said the firm is optimistic about the improving market sentiment buoyed by the strengthening of ringgit against US dollar and the strong Q2 2024 GDP growth of 5.9 per cent.
"The FBM KLCI has continued its upward trajectory, testing the 1,650 level, which is a significant psychological and technical resistance point. The benchmark index is now well above the 20-day and 50-day moving averages, both of which have turned upward, signaling a strong bullish trend.
"Hence, we anticipate the FBM KLCI to trend within the range of 1,630-1,660 for the week," he said.
Meanwhile in early trading, the US dollar-ringgit exchange rate broke through a key support level of RM4.4005, positioning the ringgit as one of the best-performing currencies in the Asian region.
As of 5pm, the pair was traded at RM4.3780.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this strength followed a series of US economic data releases that have alleviated fears of a recession, suggesting that the US economy might be on track for a soft landing.
"With the ringgit piercing its support level, the next critical threshold is RM4.3000. This development highlights the ringgit's robustness in a volatile economic environment," added Afzanizam.