KUALA LUMPUR: There was an expected hiccup in the domestic stock market rally today following some negative sentiment on Wall Street triggered by hawkish projections on the US interest rate.
Jubilation at evidence of slowing inflation in the US economy turned sour overnight as the Federal Reserve announced a higher-than-anticipated terminal rate of 5.1% in its bid to slow consumer price growth.
While the central bank raised the rate by an expected 50 basis points, the forecast of a higher terminal rate doused investor hopes for shorter rate-hike cycle.
At 9.05am, the FBM KLCI was down 5.51 points to 1,477.66. This was after the benchmark had posted a 0.9% increase in the previous session on hopes of a more dovish Fed announcement.
The market breath was negative with 139 decliners compared with 118 gainers.Trading volume was 110.58 million shares valued at RM42.87mil.
Bursa Malaysia had seen an inflow of foreign interest in the previous session after nine straight days of net selling, although the decline in blue chip prices may be an indicator that the flow has once again turned negative.
Malacca Securities research said in its market report cautious sentiment may return following the Fed announcement with investors now turning their attention to the interest rate decisions in the UK and Europe.
"Investors may favour the banking sector amid the prolonged interest rate upcycle environment. On the other hand, the technology sector may stage a pullback following the cautious sentiment on Wall Street," it added.
On the FBM KLCI, Public Bank fell five sen to RM4.39, Maybank dropped two sen to RM8.75 and CIMB shed four sen to RM5.79.
Tenaga Nasional slid si sen to RM9.28 and IHH was down six sen to RM5.88.
Among top actives on the market, NWP was up one sen to 21.5 sen, Nylex rose four sen to 25.5 sen and Lay Hong was up one sen to 28 sen.
