KUALA LUMPUR (Dec 3): The FBM KLCI closed 0.17% lower today in line with Asian regional markets following Federal Reserve (Fed) chair Janet Yellen's signal that the Fed was ready to hike interest rates.

At 5pm, the composite index declined 2.85 points to close at 1,673.92 points.

The market saw 2.04 billion shares worth RM1.837 billion traded.

Gainers were led by Ajinomoto (Malaysia) Bhd, Bintulu Port Holdings Bhd, Petronas Gas Bhd and Oriental Interest Bhd.

Decliners were led by Hong Leong Bank Bhd, P.I.E. Industrial Bhd, Hartalega Holdings Bhd and Dutch Lady Milk Industries Bhd.

Market breadth was negative as decliners edged out gainers at 525 against 306; while 354 counters remained unchanged.

Areca Capital Sdn Bhd chief executive officer and fund manager Danny Wong said the local market was still looking for fresh catalysts to ignite buying.

"The market is waiting for a new direction so it is either investors take profit or wait for fresh leads, although there is not much profit to be made," he said.

"Shares of some small-cap companies fell due to profit taking but it is reasonable. Small-cap companies had a good run over the past one to two quarters and the prices have been quite high," he added.

He said the market is looking to the US non-farm payrolls report that will be disclosed on Friday for further direction after the disappointing US manufacturing data released this week dented investor confidence.

According to the Institute for Supply Management data released on Tuesday, the US manufacturing sector contracted last month to 48.6, after reading 50.1 in October. This is the first time the index has been below 50 since November 2012, although construction spending rose in October to its highest since December 2007.

Last night, the Dow Jones Industrial Average fell 0.89% or 158.67 points following Yellen's comments that she was "looking forward" to a US rate hike that will be seen as a testament to the economy's recovery from recession, although she did not indicate if she still expected a hike would be warranted at the Fed's last policy meeting of the year on Dec 15–16, Reuters reported.

Asian regional markets also fell in line with the developments.

Hong Kong's Hang Seng declined 0.28% or 62.68 points, South Korea's Kospi fell 0.76% or 15.22 points, while Japan's Nikkei 225 rose 0.01% or 1.77 points, as the European Central Bank is expected to deliver measures to curb low inflation.

Meanwhile, the US dollar strengthened on the back of Yellen's comments and stronger-than-expected ADP private employment report, which propelled the dollar index to a 12½-year high.

Despite this, the ringgit strengthened against the US dollar to 4.2215 at the time of writing, buoyed by an increase in crude oil prices following a report by Energy Intelligence stating that Saudi Arabia will propose a cut of 1 million barrels per day (bpd) in Organization of the Petroleum Exporting Countries  (OPEC) output, Reuters reported.

At the time of writing, the January futures contract for WTI crude oil rose 50 cents to US$40.44 per barrel while Brent crude oil rose 62 cents to US$43.11 per barrel.

(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)