KUALA LUMPUR (Dec 17): The FBM KLCI is seen opening higher today in line with the overnight rally at global markets after the US Federal Reserve (Fed) raised interest rates, but gains in the local market may be lacklustre.

Global equity markets on Wednesday cheered the Fed's decision to raise interest rates for the first time in nearly a decade, while the slump in oil prices resumed after a brief respite in the prior session, according to Reuters.

The US central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25% and 0.5%, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs, it said.

AllianceDBS Research in its evening edition Wednesday said that despite the weak down close in the preceding day, the FBM KLCI had on Dec 16 opened the day on a firm note. The benchmark index subsequently traded to 1,638.37.

However, it said non-follow through buying support in the area of 1,638.37 saw the emergence of renewed selling interest, which pushed the market down to 1,628.76 before settling at 1,634.13 (up 11.29 points or 0.70%).

"In the broader market, gainers outnumbered losers with 525 stocks ending higher and 292 stocks finishing lower. That gave a market breadth of 1.79 indicating the bulls were in control," it said.

AllianceDBS Research said the benchmark index registered a higher high and higher low on Dec 16 after making lower low for six consecutive days.

"This market set-up may have been long awaited after the recent sell-off, but buying confidence remained weak at this juncture.

"Many buyers were still seen not convinced of the up close on Dec 16, more technical confirmation is thus necessary in order to see a return of more willing buyers.

"Nonetheless, the day's high of 1,638.37 on Dec 16 suggested the intention on the part of certain market participants to pull the benchmark index away from the immediate risk of breaking below the 1,620 support after the 1,622.84 settlement on Dec 15," it said.

The research house said the resistance was pegged at 1,645, adding that, indicator wise, the MACD was below the nine-day moving average line.

"The analysis of overall market action on Dec 17 revealed that buying power was weaker than selling pressure.

"As such, the FBM KLCI would likely trade below the 1,628.76 level on Dec 17," said AllianceDBS Research.