KLCI crosses 1,200 in early trade on US Fed rate cut

KUALA LUMPUR: Asian markets rallied in early trade on Wednesday, with the KLCI crossing the crucial 1,200 level, after the US Federal Reserve cut interest rates by 75 basis points to 2.25%.

At 10am, the KLCI was up 21.57 points or 1.84% to 1,201.59. Turnover was 200 million shares valued at RM290mil. There were 355 gainers, 97 losers and 155 counters unchanged.

Asian stocks rallied with Hong Kong’s Hang Seng Index openeing 3.78% or 807.27 points higher at 22,191.88; Japan’s Nikkei 225 rose 2.75% to 12,292.73; Singapore’s Straits Times Index added 2.49% to 2,904.04 while Shanghai’s A Share Index added 0.89% to 3,884.86.

The Federal Reserve slashed US interest rates on Tuesday, boosting Wall Street, which was already higher on stronger-than-expected investment bank earnings. The latest cut in interest rate took benchmark overnight rates down to 2.25%, the lowest since February 2005.

The Dow Jones Industrial Average closed 3.1% higher to 12,392.66.

At Bursa Malaysia, analysts said the announcement of the new Cabinet line-up might also help local sentiment.

“Although today’s market may provide some relief for the bulls, the longer term uncertainty remains. Look for the initial resistance level at 1,200 followed by the 1,242,” said OSK Investment Research.

JAKS was the most active stock with 12.9 million shares done, it rose one sen to 65.5 sen while KPS added four sen to RM1.41 as the multi-billion-ringgit Selangor-Pahang water transfer project remains intact.

MRCB rose two sen to RM1.35 in active trade while UEM World added 11 sen to RM3.04.

The major gainers were BAT, surging RM1.50 to RM43.50 while DiGi and IOI Properties advanced 40 sen each to RM22.50 and RM11.60 respectively. Heavyweight Maybank added 25 sen to RM8.75. Plantation stocks KL Kepong and Chin Teik rose 30 sen each to RM 15 and RM7.25 while IOI Corp added 25 sen to RM6.90.