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Stocks

Shares, ringgit rise tracking overnight crude price rebound, Fed expectations help

KUALA LUMPUR (NewsRise) -- Malaysian shares rose Wednesday, while the ringgit jumped to its highest levels this year as an overnight rebound in crude prices lifted sentiment for the oil-exporting nation's assets.

     Expectations of a dovish policy statement by the U.S. Federal Reserve also supported sentiment in Asia.

     The nation's benchmark FTSE Bursa Malaysia KLCI rose 0.30% to 1,631.54 points, its highest level since January 14. The clouding of global economic outlook and ongoing risk aversion has driven a 3.6% decline in the index for the month.

     The ringgit rose 0.83% to 4.253 Wednesday, its highest level since December 7. The recent recovery in crude oil prices and Malaysia's Prime Minister Najib Razak being cleared of graft charges has helped the ringgit turn higher for the month. The currency, which had slipped as much as 3% in January, is now up 0.86% in 2016 so far, and is among the best performing Asian currencies.

     SapuraKencana Petroleum, Petronas Gas and banking stocks led the gains on the index, while Sime Darby and MISC were among the main decliners.

     Brent crude oil rose over 4% Tuesday. Short-covering, expectations that large oil producers may cut back production and cold weather in North America have helped oil prices recover about 13% since the 12-year lows touched last week.  However for the year, prices are down over 16%.

     The U.S. central bank concludes its two-day meeting later today, and is widely expected to stand pat on interest rates after raising them for the first time in a decade in December. Investors will closely watch the bank's assessment of U.S. growth outlook and hints about the possibility or timing of future rate increases.

     "No change in interest rate is seen, but the Fed will leave its options open for the next meeting in March," said Charu Chanana, a research analyst at financial advisory firm FORECAST. "Labor market strength to be noted but slower economic growth and global volatilities will also be likely incorporated in the statement."

     Other Southeast Asian markets closed higher Wednesday, led by a 3.1% rally on the Philippine's PSE Composite index. Thailand's SET index and Singapore's Strait Times index advanced 0.79% and 0.31%. Indonesia's Jakarta Stock Exchange Composite rose 1.62%.

     In other Asian markets, Japan's Nikkei 225 index and Hong Kong's Hang Seng rose 2.72% and 1.02%. South Korea's Kospi advanced 1.66%. However, China's Shanghai composite index slipped half a percent.

     On the KLCI, 19 of the 30 constituents ended higher, while overall advancing issues outnumbered declining ones 463 to 375.

     Foreign investors were net buyers on the KLCI for a second day Tuesday, buying shares worth 23.6 million ringgit ($5.6 million), according to BIMB Securities. The turmoil in global markets has prompted overseas investors to withdraw almost 2.2 billion ringgit from Malaysian shares since the beginning of 2016.

     SapuraKencana Petroleum rose 3.12% to 1.65 ringgit. The nation's biggest oil and gas services company has fallen more than 20% in January, weighed down by declining crude oil prices.

     Petronas Gas, Malaysia's leading gas infrastructure and utilities company, gained for a third consecutive session, rising 3.11% to 21.88 ringgit. Petronas Chemicals rose 1.32% to 6.93 ringgit.

     Among banking stocks, RHB Capital advanced 0.4% to 5.03, Hong Leong Financial Group rose 0.75% to 13.4 ringgit, while heavyweight Malayan Banking gained 0.6% to 8.34 ringgit.

     Astro Malaysia Holdings rose for the fourth consecutive session, gaining 2.72% to 2.64 ringgit Wednesday. The television services provider fell to a record low earlier in the month, hurt by the entry of U.S. internet video-streaming service Netflix.

     Communications provider Telekom Malaysia rose 0.91% to 6.65 ringgit.

     Sime Darby fell 2.03% to 7.23 ringgit, making it the worst-performing stock Wednesday. The plantations-to-motor-conglomerate rose over 3% in the previous week.

     MISC declined 1.45% to 8.82 ringgit. Late Tuesday Moody's Investors Service placed MISC's ratings on review following a review for downgrade on its parent Petroliam Nasional.

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