KUALA LUMPUR: Bursa Malaysia's benchmark index today hit its highest level in more than two years, fuelled by the country's estimate-beating growth print for the first quarter (Q1) of 2024.
The local stocks rallied by midday, underpinned by strong buying activity across all sectors.
This followed Bank Negara Malaysia's announcement that the economy expanded 4.2 per cent in Q1, marking its fastest pace in a year and outpacing market estimate of 3.9 per cent.
At 12.30pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 6.03 points to 1,617.14, its highest in 26 months, from yesterday's closing of 1,611.11.
The benchmark index opened 1.31 points higher at 1,612.42 and fluctuated between 1,611.93 and 1,617.57 throughout the morning session.
The index slowed a bit at the close but still gained 0.34 per cent or 5.51 points to 1,616.62, compared to yesterday's close of 1,611.11.
On the broader market, gainers led losers by 845 to 374, while 498 counters remained unchanged.
Rakuten Trade Sdn Bhd equity research vice president Thong Pak Leng said gthe bullish momentum is expected to persist in the short to mid-term with the index hitting a new 52-week high.
"We anticipate this momentum will drive the index towards the next resistance level of 1,620, and a breakthrough above this level could signal further upward movement," he added.
Thong indicated that the immediate support levels are now between 1,576 and 1,589.
Consequently, he expects the index to fluctuate within the 1,605 to 1,635 range over the next week.
He noted that the FBM KLCI has extended its rally, breaking out from a one-week bullish rectangular pattern today.
"We maintain a positive market outlook but do not dismiss the chance of profit-taking activities," he said.
Hong Leong Investment Bank Bhd (HLIB) said FBM KLCI could fluctuate in the short term as investors assess the more crucial later part of the May reporting season, which serves as a reality check to sustain further gains.
Nevertheless, HLIB is cautiously optimistic that the index will revisit 1,620-1,646 zones after a mild sideways consolidation, underpinned by increased foreign inflows.
"This will be also driven by a recovering ringgit, Fed's rate-cut optimism, political stability and expected ongoing economic reforms fostering long term growth and competitiveness," it said in a note today.
HLIB noted that the FBM KLCI has remained strong above its 10-day average, suggesting strong buying pressure that could push the index towards 1,620-1,646.