KUALA LUMPUR (Dec 15): The FBM KLCI declined 0.38% today following the US Federal Reserve’s (Fed) decision to raise its benchmark interest rate by 25bps to a range of between 0.5% and 0.75%.

At 5pm, the FBM KLCI fell 6.3 points or 0.38% to close at 1,636.99.

Areca Capital Sdn Bhd chief executive officer Danny Wong said the KLCI was weighed by selling in selective blue chip counters today, following the hike in the US interest rate.

“The KLCI is down as there are some selective selling of certain companies’ stocks. I think this will continue for a while, but the decision on the US interest rate has removed the uncertainty factor which has affected the local market previously,” he said.

He added that the Fed’s indication of three rate hikes next year has also provided clarity on the US interest rates going forward.

“I think the KLCI will not be subdued for too long in view of the year-end window dressing, while crude oil prices are trading at around US$53 to US$54 per barrel. The fundamentals of the local market is intact,” said Wong.

Across the board some 1.21 billion shares worth RM1.48 billion were exchanged. Decliners beat gainers at 376 against 351, while 365 counters were unchanged.

Among the decliners were blue chip counters such as British American Tobacco (Malaysia) Bhd and Hong Leong Financial Group Bhd, while the gainers were led by Nestle (Malaysia) Bhd. The top actively traded stock was Hibiscus Petroleum Bhd.

Reuters reported that Asian shares and currencies softened on Thursday after the Federal Reserve raised rates for the first time in a year and hinted at the risk of a faster pace of tightening than investors were positioned for.

Yields on short-term US debt surged to the highest since 2009, sending the dollar index to peaks not seen in almost 14 years, which in turn prompted China's central bank to set the yuan at its weakest level against the greenback since 2008, it said.