Malaysia’s stock market, which has been underperforming since the start of the year, may strengthen as business continuity was expected with ruling coalition BN retaining power in Parliament, after the fiercest election battle seen since independence.

Benchmark FBM KLCI index was volatile in early trading, rising by 132 points to a record 1,826 level on market opening before being sold down to 1,745 levels.

The market had closed lower at 1,694 on Friday before polling day on Sunday.

By midday, close to 830 million shares were traded on Bursa Malaysia.

“The initial euphoria is expected... but the rally may be short-lived as there are still major issues to be sorted out,” the head of equity research at a local bank said.

BN - which has ruled Malaysia for almost 56 years - has won 133 out of 222 parliamentary seats, retaining federal power although opposition Pakatan Rakyat still firmly controls richer states Penang and Selangor.

Pakatan Rakyat gained seven more seats than the 2008 elections, but failed to unseat the government as some had expected.

Almost 80 percent of the 13 million registered Malaysian voters cast their vote on Sunday, the biggest ever showing of democratic power in the country.

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