KLCI down 0.42% amid US interest rate speculation

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KUALA LUMPUR (Aug 19): The FBM KLCI retreated 0.42% as investors speculate on the possibility of an increase in U.S. interest rate in the near term, after U.S. policy makers reiterated the case for a hike.

At 5 p.m., the benchmark index fell 7.19 points or 0.42% to close at 1,687.68. On a week-on-week basis, the KLCI gained 0.21% since it closed at 1,684.15 on Aug 12.

JF Apex Securities Bhd senior analyst Lee Cherng Wee said the speculation on U.S. interest rate has affected the KLCI, expecting the index to trade sideways.

“The market is down due to the speculation of a hike in U.S. interest rate within the year. The KLCI had almost touched the 1,700 level, but it is now retreating. The KLCI will probably trade sideways in the near term,” he said.

Going forward, he said a continued climb in global crude oil prices could lift the index, but noted that the recent rebound in oil prices had little impact on the KLCI.

Bursa Malaysia recorded a total of 2.2 billion trades today, worth RM1.7 billion. Decliners outnumbered gainers at 523 against 319, while 383 counters were unchanged.

The decliners were led by Dutch Lady Milk Industries Bhd, United Plantations Bhd and United U-Li Corp Bhd, while Kuala Lumpur Kepong Bhd led the gainers. The most actively-traded stock was M3 Technologies (Asia) Bhd.

Across the region, Japan’s Nikkei 225 gained 0.36%, South Korea’s Kospi rose 0.04%, while Hong Kong’s Hang Seng fell 0.37%.

Reuters reported Asian stocks retreated today as traders took profits from shares close to one-year highs, while the dollar edged up from a near eight-week low, after some Federal Reserve officials reiterated the case for raising interest rates in coming months.

MSCI’s broadest index of Asia-Pacific shares outside Japan pulled back 0.5%, it said.