KUALA LUMPUR: The FBM KLCI rebounded at Tuesday’s open after four straight days of declines, but gains are expected to be capped ahead of the US Federal Reserve’s decision on the lending rate this week.

With market’s pricing in a high likelihood the US central bank will slash the Federal deposit rate by a quarter-percentage point, any decision to hold steady or raise the cost of lending will serve as a shock to global markets.

At present, CME FedWatch has pegged an 87.3% probability of a 25 basis points reduction in the rate, and 12.7% odds of the Fed holding still.

The uncertainty, however, is weighing on the local market. The benchmark index rose 6.36 points to 1,619.14 at the starting buzzer, but minutes later, retraced lower to just a fraction above the reference price, indicating strong profit-taking pressure.

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