Rate cuts bet continue to fuel market gains

KUALA LUMPUR (Sept 11): The FBM KLCI climbed 0.3% to a two-week high of 1,590.8 on Wednesday, extending its winning streak for a third straight session in tandem with Wall Street and regional peers. Market breadth was positive, with 525 gainers outpacing 481 losers. Telecommunications (+1.7%), Utilities (+1.5%) and Healthcare (+0.8%) led sectoral gains, while Industrial Products (-0.7%) and REITs (-0.5%) lagged.

Globally, Wall Street ended mixed as the S&P 500 and Nasdaq marked fresh record highs, lifted by Oracle’s upbeat revenue forecast. The Dow Jones, however, slipped 0.5% from its peak. Market sentiment improved after the US producer price index unexpectedly fell 0.1% in August, easing concerns over sticky inflation and fuelling optimism for steeper Federal Reserve rate cuts. European equities followed Wall Street higher, while Asian markets rallied, with Japan’s Nikkei 225 up 0.9%, Hong Kong’s Hang Seng Index gaining 1.0%, and China’s Shanghai Composite edging up 0.1%.

Rate cuts bet

In China, consumer prices slipped 0.4% in August, a steeper decline than expected, sparking hopes of fresh government stimulus.

“Investors remain focused on the Fed’s rate-cut trajectory ahead of next week’s FOMC meeting. Following the softer PPI reading, attention now turns to Thursday’s US CPI release for further guidance,” one market analyst said.

Geopolitical tensions also linger, with investors watching for spillover effects on commodities after Poland intercepted drones during a widespread Russian attack in western Ukraine.

On the local front, analysts expect the FBM KLCI to track regional momentum, with a dovish Fed stance likely to “support risk appetite, portfolio flows, and liquidity in the local bourse.”

Gold-related counters may see buying interest as gold prices hit fresh highs on rising rate-cut bets, while energy stocks could attract attention with Brent crude nearing US$70 per barrel.

From a technical perspective, bullish momentum remains intact, though indicators are mixed. The MACD Line ended below the Signal Line, while the RSI stayed above 50. Immediate resistance is seen at 1,610, with support at 1,550.

Business News

Staff Writer

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