KUALA LUMPUR: Blue chips closed off Monday's low while key Asian markets ended in the red as the US Federal Reserve was set to cut interest rates lesser than expected.

At 5pm, the KLCI was down 2.79 points or 0.17% at 1,655.40. Turnover was 2.65 billion shares valued at RM1.54bil. Decliners beat advancers five to three or 508 losers to 297 gainers and 428 counters unchanged.

Key Asian markets ended lower, tracking a global retreat as expectations for an aggressive interest rate cut at its next meeting were dialled back, Reuters reported. 

Expectations for a 50-bp cut were scaled back further after the Wall Street Journal reported the Fed was likely to cut rates by 25 bps when it meets later this month, and may make further cuts in the future given global growth and trade uncertainties, Reuters reported.

The Hang Seng index closed 1.4% lower while the China Enterprises Index ended down 1.3%.  Japan's Nikkei 225 was down 0.23%, China's Shanghai Composite lost 1.27% and Singapore's STI lost 0.67%.

At Bursa, Petronas Chemical fell 11 sen to RM7.70 and erased 1.37 points from the KLCI. Affin Hwang Capital Research expects soft earnings for the company in the second quarter and further weakening in the third quarter with a heavy plant turnaround. Petronas Gas lost six sen to RM16.90 and Petronas Dagangan two sen to RM24.30 while Dialog shed two sen also to RM3.49.

The decline in the oil and gas stocks were in contrast with the spike in crude oil prices on concerns that Iran's seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf. US light crude oil rallied US$1.05 to US$56.68 and Brent climbed US$1.32 to US$63.79.

As for banks, Hong Leong Bank lost 26 sen to RM18.34 and erased 0.88 of a point. 

Fitch Ratings affirmed the long-term issuer default rating (IDR) of Hong Leong Bank at “A-”  with a stable outlook.

It said Hong Leong Bank's  IDRs and viability rating are anchored by its conservative risk appetite and granular, retail-centric loan book, which drive its stable asset quality and earning performance through business cycles. 

Maybank shed five sen to RM8.82 and wiped out 0.87 of a point, CIMB was four sen lower lower at RM5.20, AmBank and Public Bank were flat at RM4.33 and RM22.88 but RHB Bank edged up three sen to RM5.69.

Tenaga Nasional rose 10 sen to RM13.74 and nudged the KLCI up 10 sen to RM13.74, Press Metal rose eight sen to RM4.50 but Genting fell four sen to RM6.59 and Sime Darby one sen lower at RM2.24.

Crude palm oil for third month delivery rose RM14 to RM1,986 per tonne. Bloomberg reported A palm oil bull run could begin with Indonesia's production decelerating, even before palm oil output plateaus by 2021. 

Batu Kawan lost 34 sen to RM16.18, KL Kepong 20 sen to RM23.70, Sime Plantation one sen lower at RM4.66 but IOI Corp rose one sen to RM4.24 and PPB Group two sen higher at RM18.66.

As for telcos, Axiata and Digi rose two sen to RM5.10 and RM4.98 while Maxis fell seven sen to RM5.63 but Telekom rose 10 sen to RM4.60.

Semiconductor-related stock Pentamaster rose 17 sen to RM3.50 while Vitrox gained eight sen to RM6.94.

Baba Eco Group, which made its debut on the LEAP Market, ended its first trading day three sen higher at 16 sen.
 
The ringgit dipped 0.01% against the US dollar to 4.1132 but rose 0.35% against the pound sterling to 5.1269, it gained 0.26% against the euro to 4.6137 and edged up 0.06% to the Singapore dollar at 3.0240.