KLCI slips further as investors wait for US Fed meeting outcome

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KUALA LUMPUR (Oct 28): The FBM KLCI fell 10.44 points or 0.6% while the ringgit weakened as investors remained apprehensive ahead of the conclusion of the US Federal Reserve's two-day Federal Open Market Committee (FOMC) meeting today.

The KLCI closed at 1,686.51 at 5pm while the ringgit weakened against US dollar to 4.2705. Analysts said the KLCI was mainly dragged down by its banking and plantation constituents.

Yesterday, the KLCI fell 9.84 points or 0.6% to close at 1,696.95.

Today, the FOMC meeting is closely watched as its outcome will offer clues on the timing of US interest rate hikes. A rate rise does not bode well for Asian assets as investors turn their attention to US-dollar denominated entities.

In Malaysia, Inter-Pacific Research Sdn Bhd head of research Pong Teng Siew told theedgemarkets.com that investors were waiting for more visibility on the US rate hike.

"Corporate earnings trend is not very friendly, it creates an apprehension in the market, and fund managers do not seem to have the sense of the market direction now," Pong said.

Across Bursa Malaysia, gainers outran decliners at 449 to 383 while 314 counters remained unchanged. There were 2.15 billion shares worth RM2.05 billion traded.

Top gainers included PIE Industrial Bhd and Magni-Tech Industries Bhd, while the leading decliner was British American Tobacco (M) Bhd. XOX Bhd topped the most-active list.

Across Asia, Japan Nikkei 225 advanced 0.67% while South Korea's Kospi retreated 0.1%. Hong Kong's Hang Seng fell 0.8%.

Reuters reported that Asian stocks slipped on Wednesday but losses were capped by caution ahead of a US Federal Reserve policy decision later in the day.

The news agency added that the US Federal Reserve is expected to keep interest rates unchanged this week and may struggle to convince sceptical investors it can tighten monetary policy before the end of the year in the face of US and global economic headwinds.

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