Shares on Bursa Malaysia traded higher on Monday, Oct 19 with the FBM KLCI rising to yet another new year high after crossing the psychologically important 1,250-level last Friday.

Investors were looking forward to positive economic 3Q09 GDP data from China and the upcoming 2010 Budget, both due this week, as well as the upcoming earnings season.

Regional stock markets were also generally higher amid continued recovery hopes and earnings optimism. Investors are expecting positive economic data from China, where GDP for 3Q09 is widely expected to improve over the 7.9% pace set in 2Q09. Last week, China reported a 15.2% fall in exports for September – the smallest drop year to date and better than market expectations.

Except for a slight dip in the morning, the FBM KLCI was in positive territory almost the entire day with gains accelerating in the afternoon. The index ended 4.7 points higher at 1,261.5. Market breadth was positive with advancing stocks beating declining ones by a 3-to-2 ratio at the close. Volume was relatively high at 1.33 billion shares, up from Friday’s 1.15 billion shares.  

Smaller capitalized stocks dominated trading, led by the likes of TPE, DBE, DPS, KNM, Hovid and SAAG. Blue chips and glove makers made up most of the top gainers’ list, including Hong Leong Industries, Supermax, Genting, CIMB and Kossan. Major losers include BAT, NSTP and DiGi.

The current US earnings season is turning out generally better than market expectations so far. And that has led to the rally on Wall Street over the past two weeks that saw the Dow Jones Industrials Average index topping the 10,000-point mark.

Given that the Malaysian economy was relatively more resilient during the recession, this is also leading to optimism for our own earnings season, which starts in earnest next month.