The benchmark FTSE Bursa Malaysia KLCI advanced 0.7 per cent to 1,669.66 points.
The ringgit rose 0.7 per cent to 4.106 against the dollar, its best session in over a month, as the greenback edged lower after the Fed’s policy announcement, according to a report in the Nikkei Asian Review (NAR).
The dollar index, measured against major world currencies, fell almost half a percent overnight and extended losses Thursday.
The Fed left interest rates unchanged yesterday, as was widely expected, but hinted strongly at a likely increase before the end of the year, said the NAR report.
It added that risk appetite received a boost because of the central bank’s hints at a slower trajectory of expected rate hikes next year and over the longer term.
Sia Ket Ee, an analyst with Hong Leong Investment Bank, was quoted by NAR as saying: “Notwithstanding the firmer probability of (a) December hike, the less hawkish stance in 2017 is expected to cause some short-term weakness in the dollar.
“However, continued easy monetary policies by other major central banks amid still high downside would still make the dollar attractive from the growth and rate differential angle.”
This was the central bank’s sixth consecutive pause after its first rate increase in almost a decade last December, as sluggish US economic growth this year and uncertain global growth outlook have prompted policymakers to adopt a cautious stance.
Sia maintained expectations of a 25 basis point hike in December, according to the NAR report.
He expects the ringgit to trade in a 4.00 to 4.20 range against the dollar for the rest of this year. The ringgit is up a little over 4 per cent so far this year, heading for its first annual gain in four years.
Meanwhile, on the KLCI, 23 of the 30 constituents ended higher Thursday and four closed unchanged, while overall advancing issues outnumbered declining ones 529 to 313.
DiGi.Com rose 3.7 per cent to RM5.04 Thursday. Sime Darby advanced 1.8 per cent to RM7.89, while Telekom Malaysia advanced 1.5 per cent to RM6.80.
Hospital operator IHH Healthcare slipped 1.9 per cent to RM6.37 while KLCC Property Holdings dropped 0.6 per cent to RM7.75.