Malaysian shares ended at its highest in nearly two-weeks on Monday, as foreign investors bought blue chips like power firm Tenaga Nasional Bhd and phone firm Telekom Malaysia Bhd.
A rally in other major Asian markets also helped boost sentiment. The Japanese market ended 2.7 percent up, its biggest one-day gain in four months.
The benchmark 100-share Kuala Lumpur Composite Index was up 1.3 percent at 865.07 points. This is its highest finish since September 21.
Overall volume was a strong 517 million shares worth 1.1 billion ringgit ($290 million) as gainers beat decliners four to one.
Shares of Proton Holdings Bhd rose 4.6 percent to end at 9.10 ringgit ($2.39), the highest since April 21.
Europe's largest carmaker, Volkswagen, confirmed late on Friday it was in talks with the Malaysian national car maker, a move that could lead to a partnership. Proton shares rose six percent on Friday after a newspaper report, citing unidentified sources, said the German auto firm was looking to form a partnership with Proton in a deal that would give Volkswagen a foothold in Southeast Asia's fast-growing auto market.
Lender Affin Holdings Bhd extended its gains, rising 4.3 percent to close at 1.70 ringgit after a weekend report said Dutch-based bank ABN Amro was eyeing a 30 percent stake in the group's unit, Affin Bank Bhd, Malaysia's seventh-largest lender. Among Kuala Lumpur's heavyweights, Malaysia's biggest power firm Tenaga led the index with a 2.7 percent rise to 11.30 ringgit while phone firm Telekom gained 1.8 percent to 11.50 ringgit.