Kuala Lumpur Index Slips Near 1,680 as Fed Rate Hike Weighs on Asian Markets

With Malaysia Day observed on Wednesday, the Malaysian stock market extended its decline, slipping lower just one day after snapping a four-day losing streak that had pushed the benchmark nearly 10 points, or 0.6 percent, lower. The Kuala Lumpur Composite Index remains hovering just below the 1,680-point level and could face additional pressure on Thursday.

Sentiment across Asian markets remained cautious following the U.S. Federal Reserve’s decision to raise interest rates for the first time in three years. European markets advanced while U.S. bourses closed lower, and Asian markets were expected to follow the latter’s lead.

The KLCI closed sharply lower on Tuesday, weighed down by losses in financial shares, plantation stocks, and industrial names.

The index lost 18.80 points, or 1.10 percent, to settle at 1,679.21, having traded in a range between 1,678.06 and 1,694.91.

Wall Street provided a negative lead as major averages opened mixed on Wednesday and held steady through much of the session before sliding lower in late trading.

The Dow plunged 631.21 points, or 1.21 percent, to finish at 51,461.90, while the NASDAQ edged down 3.15 points, or 0.01 percent, to close at 25,978.42, and the S&P 500 fell 33.92 points, or 0.45 percent, to end at 7,551.81.

The late-session weakness on Wall Street came after the Federal Reserve carried out its widely anticipated rate hike, the first since July 2023.

Selling accelerated as Fed Chair Kevin Warsh held his post-meeting press conference, during which he emphasized persistent inflation. According to the projections, a majority of Fed officials anticipate rates will remain above 4 percent by the end of 2026, pointing to at least one additional rate hike this year.

Crude oil prices tumbled on Wednesday in the aftermath of the Fed’s rate decision. Additionally, reports indicating that Saudi Arabia was loading crude shipments via Oman eased supply-side concerns. West Texas Intermediate crude for October delivery fell $3.61, or 3.41 percent, to $102.22 per barrel.

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