KUALA LUMPUR (Dec 4): The FBM KLCI fell 5.48 points or 0.3% following the disappointment on the European Centre Bank's (ECB) less-than-expected interest rate cut and ahead of a potential US rate hike this month.

Malaysia's KLCI settled at 1,668.44 points at 12:30pm, tracking US and Asian share market losses.

Overnight in the US, the Dow Jones Industrial Average declined 1.42%, S&P 500 fell 1.44% while Nasdaq Composite was 1.67% lower.

Today, Japan's Nikkei 225 fell 2.32% while Hong Kong's Hang Seng declined 1.07%.

US policy makers will meet this Dec 15 and 16 to decide on the country's monetary policy. A US rate hike does not bode well for emerging Asian markets, like Malaysia, as investors turn their attention to US dollar-denominated assets.

In Malaysia, Mercury Securities research head Edmund Tham said the market was focusing on the ECB and the US Federal Reserve's remarks.

"The local market this morning was denominated by small-mid caps," Tham told theedgemarkets.com.

Bursa Malaysia decliners outpaced gainers by 412 to 239 while 338 counters traded unchanged. Volume was 741.65 million shares valued at RM578.91 million.

Kossan Rubber Industries Bhd was the top gainer while leading the decliner was British American Tobacco (M) Bhd.

Genetec Technology Bhd and Instacom Group Bhd were among the most-actively traded counters.

Among the Bursa gainers was Fajarbaru Builder Group Bhd, which confirmed that it was partnering a Chinese firm to bid for the RM7 billion Gemas-Johor Bahru rail project.

At 12:30pm, Fajarbaru shares rose 0.5 sen or 1% to 54 sen with some nine million shares done.

Among the decliners, Halex Holdings Bhd fell as much as three sen or 4% to settle at 65 sen with some three million shares changing hands.

Halex shares fell after the group said it was not pursuing its proposed lottery venture in Cambodia.

(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.)