KUALA LUMPUR: Bursa Malaysia might test the psychological important 1,600-point level for the first time in its history this week.
Late fund buying on selected stocks pushed the index to a fresh historic close of 1,594.74-points.
The FBM KLCI continued to scale new highs on sporadic bargain hunting activity, undergoing a healthy correction in the past week.
Bursa Malaysia was firmly positive since the bulls made it to the uncharted territory, riding on the strength of overseas equities, especially Wall Street, optimism of global economy and improvement in the eurozone debt crisis.
Last Friday, the FBM KLCI closed 4.5 points higher as a result of the government's Economic Transformation Programme (ETP) and plans to loosen its shareholding in government-linked companies.
"At current levels, the market certainly needs more good news to sustain the rise," said an analyst.
Technically, the local market continues to paint a bullish landscape, with the key index turning sideways this week, pending a clearer picture to emerge.
To the upside, stiff resistance is maintained at the 1,585-1,600 points band. Thereafter, Bursa Malaysia is expected to encounter significant challenges at every 20 or 30 points interval.
Near-term sentiment will hinge on the soon-to-be-released financial sector master plan, results of the Economic Transformation Programme tender outs and banking mergers.
Elsewhere, Portugal's sovereign debt, the US debt ceiling, Thailand's new regime's policies and China's interest rate cycle will also be on the investor radar.
Last week, Bank Negara Malaysia decided to keep the Overnight Policy Rate at 3 per cent but raised the statutory reserve requirement from 3 per cent to 4 per cent as a measure to manage the significant build-up in liquidity.
The biggest near-term driver for local sectors would come from Japan which is recovering from the March quake faster than most economists expected.
Stocks in the limelight include banking and oil and gas such as BIMB, AFG, Petronas Dagangan and Sapura Crest due to short term holding strategies.
On a Friday-to-Friday basis, the FBM KLCI rose to 1,594.74 from 1,582.94 and the Finance Index rose 11.22 points to 15,038.74.
Weekly volume rose to 4.66 billion shares valued at RM8.63 billion from the 4.52 billion shares valued at RM8.27 billion previously.
Read more: FBM KLCI may test 1,600 barrier http://www.btimes.com.my/Current_News/BTIMES/articles/rupind/Article/#ixzz1Rmmd2UZK
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