KLCI flat after falling on profit taking, US rate hike talk

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KUALA LUMPUR (Oct 25): The FBM KLCI cut losses to end 0.33 point lower after falling on profit taking and as investors anticipated a near-term US interest rate hike.

At 5pm, the KLCI closed at 1,677.43 points. Earlier, the index gained to its intraday high at 1,679 points before touching its intraday low at 1,673.18 points.

Bursa Malaysia saw 1.43 billion shares valued at RM1.84 billion exchanged. Decliners beat gainers at 422 against 334.

Investors took profit after the KLCI rose 7.78 points yesterday. US interest rate hikes do not bode well for Asian shares in anticipation that investors will shift their money back to US dollar-denominated assets.

Today, Reuters reported that Japanese shares hit a six-month top on Tuesday as the dollar advanced on the yen, while risk sentiment got a lift after factory surveys in the United States and Europe boasted the best readings of the year so far.

The better news led investors to nudge up the probability of a December US rate hike from the Federal Reserve to around 74% and pressured Treasury prices.

In Malaysia, Inter-Pacific Securities Sdn Bhd research head Pong Teng Siew told theedgemarkets.com that the KLCI fell on profit-taking today after yesterday's gain on local fund buying following Malaysia's Budget 2017 announcement.

"The KLCI was choppy today after yesterday's sizeable gain. The retreat could partly be due to profit-taking activity after yesterday's increase," Pong said.