KLCI extends losses on Dec US rate hike expectation

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KUALA LUMPUR (Oct 29): The FBM KLCI fell 19.53 points or 1.2% while the ringgit weakened in anticipation that the US will raise interest rates this December.

At 5pm, the KLCI settled at its intra-day low of 1,666.98 points. The ringgit weakened to 4.2990 against the US dollar.

Public Investment Bank Bhd head of research Ching Weng Jin told theedgemarkets.com that the "KLCI went south together with major regional stock markets" due to the US Federal Reserve (Fed)'s meeting outcome.

"KLCI fell today along with regional markets in reaction to the Fed's meeting outcome, which opened the door for a rate hike by year end. Naturally, this will spur worries on capital outflow from the market," Ching said over telephone.

Bursa Malaysia saw 511 decliners outrun 393 gainers while 292 counters remained unchanged.

A total of 2.17 billion shares worth RM2.28 billion were traded.

The top decliners included British American Tobacco (M) Bhd and Dutch Lady Milk Industries Bhd. The leading gainer was P.I.E. Industrial Bhd. XOX Bhd topped the most-active list.

In regional markets, Japan's Nikkei 225 advanced 0.17% while South Korea's Kospi declined 0.41%. Hong Kong's Hang Seng Index fell 0.6%.

Reuters reported that Asian shares fell and the dollar stood tall on Thursday, after the Fed revived market expectations that it may yet raise interest rates by year end.

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