KUALA LUMPUR (Jan 26): The FBM KLCI fell on profit taking after analysts said Malaysian shares were overbought and as markets take their cue from Bank Negara Malaysia's interest rate hike.

At 9am, the KLCI opened 2.44 points or 0.1% lower at 1,843.42 points. At 9:07am, the index pared losses at 1,844.23 points. 

"With technical momentum getting more overbought, blue chips are expected to see increased profit-taking and selling interest stalling further upside, while rotational trading interest sustain on small cap oil & gas and construction stocks," TA Securities Holdings Bhd wrote in a note today.

Yesterday, the KLCI rose 8.82 points or 0.5% to close at its intraday high at 1,845.86 points after Bank Negara increased the overnight policy rate by 25 basis points to 3.25%. Bursa Malaysia's finance index rose 163.61 points or 0.94% to 17,556.50 points. 

Today, Nomura said in a note : "Overall positive for banks, NIMs (net interest margins) are likely to remain supported. In a rising rate environment, banks with more liquidity in short duration assets like interbank deposits, a high proportion of variable rate loans, a high CASA (current and savings account ) base and long-dated term deposits/funding would be impacted more positively."