KUALA LUMPUR (Dec 13): Malaysian shares may today take the cue from US interest rate talk ahead of the Federal Reserve's monetary policy meeting on Tuesday and Wednesday (December 13 and 14).

Investors may also continue to evaluate the sustainability of crude oil price gains after the Organization of the Petroleum Exporting Countries (Opec) and non-Opec countries' deal to cut output to support prices.

Current US monetary policy sentiment indicates that the nation could raise interest rates at the conclusion of the Federal Reserve's meeting. Earlier, Federal Reserve Chair Janet Yellen had said US interest rates might rise "relatively soon" in anticipation of higher US inflation due to US President-elect Donald Trump's planned expansionary fiscal policies.

Higher US interest rates do not bode well for Asian share markets in anticipation that investors will shift their money into US dollar-denominated assets.
 
At Bursa Malaysia last Friday, the FBM KLCI fell 2.33 points to close at 1,641.42 points. Yesterday, Malaysian markets were closed for holiday in conjunction with Prophet Muhammad's birthday.

In overnight US share trades, the Dow Jones Industrial Average climbed 0.2%, S&P 500 fell 0.11% while Nasdaq Composite was 0.59% lower. In oil markets, Brent climbed US$1.36 or 2.5% to US$55.69 a barrel while US oil was US$1.33 or 2.6% higher at US$52.83.

Reuters reported that on Saturday, producers from outside the Opec led by Russia, agreed to reduce output by 558,000 barrels per day (bpd), short of the target of 600,000 bpd but still the largest non-Opec contribution ever.

That followed Opec's November 30 deal to cut output by 1.2 million bpd for six months from January 1. Top exporter Saudi Arabia will cut around 486,000 bpd to reduce the supply glut that has dogged markets for two years.