KUALA LUMPUR (May 26): The FBM KCI retreated 11.95 points or 0.7% as foreign investors sold Malaysian shares. Analysts said investors had reacted to news on Greece's debt and the possible earlier-than-expected rise in US interest rates.

In Malaysia, the KLCI was traded at 1,752.12 points at 3.15pm. For comparison, the the FBM Small Cap index fell 141.23 points or 0.87% at 3.23pm.

The FBM Small Cap comprises companies within the top 98% portion of Bursa Malaysia's Main Board.

The FBM Small Cap, however, excludes stocks under the FBM Top 100 list.

M&A Securities Sdn Bhd research head Rosnani Rasul told theedgemarkets.com that investors’ jitters over Greece’s possible debt default and indications by the US' Federal Reserve that interest rate hikes might happen sooner than expected explained the KLCI’s retreat.

“It is not unexpected for foreign funds to leave the local (Malaysian) market. On one hand, there is a lot of anxiety within the global market over Greece’s inability to pay its debts. The deadline is approaching but investors are seeing no solution to the situation.

“On the other hand, you have the Fed giving very clear indications that interest rate adjustments are coming soon. With that, it is normal for funds to start selling,” said Rosnani.

Bursa Malaysia saw 180 gainers and 577 decliners while 271 counters were unchanged. Some 1.31 billion shares worth RM1.39 billion changed hands.

Top gainers included Hong Leong Financial Group Bhd and Petronas Dagangan Bhd. Leading decliners included Dutch Lady Milk Industries Bhd and Kuala Lumpur Kepong Bhd.

Xinghe Holdings Bhd was the most-actively traded stock