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Banking stocks fuel market's 2-year high 0 Comments| New Straits Times, Mar 9, 2010 | by Adeline Paul Raj AN UNEXPECTEDLY strong stock market rally led by banks yesterday lifted the key index to a two-year high, boosting sentiment and raising expectations that the market will remain bullish over the near term. "Ample liquidity, low interest rates and news flow about the global economic recovery gathering momentum - these will keep the market on an uptrend, but it won't be without volatility," said Lim Chee Sing, head of research at RHB Research. The FTSE Bursa Malaysia Kuala Lumpur Composite Index broke a major psychological resistance of 1,300 points convincingly right at the start of trade yesterday, led by strong gains in banks. ------------------------------------------------- Most Popular Articles * Obituary: Rochelle Diane Williams * THE LAST DAYS OF STUART ADAMSON; Last month the Big Country star * Obituary: MACNEILL, DAMIAN * S Magazine invades Middle East * Wife has TV host Tim back ------------------------------------------------- Most Recent Articles * * * * * The index ended the day 1.9 per cent, or 24.44 points, higher at 1,324.22, its highest close since March 3 2008. It was the best-performing market in the Asia-Pacific, after that of Japan and Hong Kong. Volume was strong with about 1.2 billion shares changing hands, some 30 per cent higher than the three-month daily average volumes. "It's definitely a bullish breakout. The key thing now is to watch if volumes still stay strong and if stocks that were pumped up (yesterday), like banks, suffer from strong profit-taking over the next few days," said a technical analyst at RHB Research. He sees the next resistance level for the index at 1,355 points in the medium term, with support at 1,300. Local and foreign funds swooped in on Public Bank Bhd, CIMB Group Holdings Bhd and Malayan Banking Bhd (Maybank) on hopes that they would benefit from higher interest margins after Bank Negara Malaysia raised the benchmark interest rate last week for the first time since April 2006. CIMB Bank Bhd, RHB Bank Bhd as well as Maybank announced yesterday that they were raising their respective base lending rates from today. "Investors seemed to be jumping over each other to buy banks, especially Public Bank," a dealer with a local brokerage remarked. Public Bank, the country's third largest lender, and CIMB closed at record highs. Public Bank, the day's biggest gainer, added 5.5 per cent to RM11.94, while CIMB gained 2.9 per cent to RM14.12. Top lender Maybank put on 1.6 per cent to RM7.52. Terrence Wong, head of research at CIMB Research, continues to have a bullish view of the market, saying that he expects the index to hit a target of 1,450 in the first half. Copyright 2010 Provided by ProQuest Information and Learning Company. All rights Reserved.