KUALA LUMPUR (July 20): The FBM KLCI fell 0.94 point while the ringgit depreciated against the US dollar on expectation the US will raise interest rates in the near term.

The US rate hike talk followed better housing starts numbers, which indicated the US economy was improving. US rate hikes do not bode well for emerging Asian markets like Malaysia in anticipation investors will shift their money back to US dollar-based assets.

In Malaysia, the KLCI ended at 1,669.61 points at 5pm. Earlier, the KLCI fell to its intraday low at 1,664.01.

The ringgit weakened to 4.0295 against the US dollar. The exchange rate was between 4.0030 and 4.0440 today.

Reuters reported that the dollar hit a four-month high against a basket of currencies and rose against the yen on Wednesday, bolstered by strong US data and growing expectations that the Federal Reserve may raise rates before the end of the year.

It was reported that profit taking weighed on Asian stocks on Wednesday after a record run on Wall Street showed signs of petering out.

In Malaysia, Malacca Securities Sdn Bhd analyst Kenneth Leong told theedgemarkets.com the KLCI tracked losses in certain Asian share markets. Japan's Nikkei 225 was 0.25% lower while South Korea's Kospi declined 0.07%.

"But towards the end of the trading day, there was some bargain hunting activities, as the KLCI recouped most of its earlier losses," Leong said.

Bursa Malaysia saw 366 decliners versus 435 advancers. A total of 1.93 billion shares valued at RM1.64 billion changed hands.

Top gainer was Panasonic Manufacturing Malaysia Bhd while leading decliner was British American Tobacco (M) Bhd. Borneo Oil Bhd was the most-actively traded counter.

Shares of Sarawak-based companies rose in anticipation that Pan Borneo Highway contracts will be awarded soon.

Among others, Cahya Mata Sarawak Bhd rose 11 sen to RM3.72 while KKB Engineering Bhd was up seven sen at RM1.67.