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Malaysia Stock Market May Test Resistance At 1,500 Points

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The Malaysia stock market has alternated between positive and negative finishes through the last 11 trading days since the end of the six-day losing streak in which it had slumped more than 15 points or 1 percent. The Kuala Lumpur Composite Index now rests just above the 1,480-point plateau and it may extend its gains on Thursday.

The global forecast for the Asian markets is upbeat following results of the FOMC's monetary policy meeting. The European and U.S. markets were solidly higher and the Asian bourses figure to open in similar fashion.

The KLCI finished slightly higher on Wednesday following gains from the glove makers and financial shares.

For the day, the index rose 1.89 points or 0.13 percent to finish at 1482.81 after trading between 1,475.37 and 1,485.08. Volume was 2.817 billion shares worth 1.745 billion ringgit. There were 442 decliners and 418 gainers.

Among the actives, Axiata dropped 0.81 percent, while CIMB Group added 0.39 percent, Digi.com lost 0.51 percent, Genting advanced 0.45 percent, Genting Malaysia rose 0.35 percent, Hartalega Holdings soared 1.59 percent, IHH Healthcare fell 0.31 percent, IOI Corporation slid 0.28 percent, Kuala Lumpur Kepong climbed 0.47 percent, Maybank was up 0.12 percent, Maxis shed 0.69 percent, MISC jumped 0.90 percent, MRDIY improved 0.29 percent, PPB Group gained 0.36 percent, Public Bank collected 0.25 percent, RHB Capital sank 0.93 percent, Sime Darby spiked 1.41 percent, Sime Darby Plantations plummeted 2.70 percent, Telekom Malaysia tumbled 1.32 percent, Tenaga Nasional rallied 0.65 percent, Top Glove surged 3.00 percent and Petronas Chemicals, Hong Leong Financial, Dialog Group, Hap Seng Consolidated and Press Metal were unchanged.

The lead from Wall Street is broadly positive as the major averages opened slightly lower on Wednesday but then surged in the afternoon to finish sharply higher.

The Dow soared 383.25 points or 1.08 percent to finish at 35,927.43, while the NASDAQ spiked 327.94 points or 2.15 percent to end at 15,565.58 and the S&P 500 jumped 75.76 points or 1.63 percent to close at 4,709.85.

The late-day rally on Wall Street came after the Fed announced its widely expected decision to accelerate the pace of reductions to its asset purchases program. Citing inflation developments and further improvement in the labor market, the Fed said it has decided to reduce the monthly pace of its net asset purchases by $30 billion per month, double the previously announced $15 billion per month.

The Fed said it expects similar reductions in the pace of net asset purchases will likely be appropriate each month, pointing to an end to the program next March. Analysts partly attributed the subsequent rally to relief that the Fed was not more aggressive in accelerating the timetable for halting its asset purchases.

Meanwhile, the Fed also announced its widely expected decision to keep the target range for the federal funds rate at zero to 0.25 percent. The central bank's latest projections forecast as many three rate hikes in 2022 compared to the lone rate hike forecast in September.

Despite the prospect of sooner than expected rate hikes, analysts suggested traders were pleased with the increased level of certainty provided by the Fed's latest projections.

Crude oil futures settled higher on Wednesday after the Energy Information Administration (EIA) said crude inventories in the U.S. dropped by 4.6 million barrels last week. West Texas Intermediate crude oil futures for January ended up by $0.14 or 0.2 percent at $70.87 a barrel.

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