While Malaysia's key index rose in early trade on buying of glove stocks, the rally stalled by mid-morning and closed 10.47 points lower at 1,520.81 entering the lunch break.
Overnight, the US Federal Reserve announced its widely expected decision to keep interest rates near zero to prop up the US economy.
While chairman Jerome Powell affirmed that more government spending was needed to aid in the economic recovery, no details were given as to further stimulus, leading to market disappointment.
Asian markets were a sea of red on Thursday led by Hong Kong's Hang Seng falling 1.6%. On the mainland, Shanghai's Composite Index fell 1.1%. Meanwhile, Japan's Nikkei slipped 0.5% and South Korea's Kospi slid 1.25%.
On the FBM KLCI, Hartalega
gained 70 sen to RM14.80 while Top Glove rose 28 sen to RM8.71 to register a positive perfromance for the index in the first hour of trading.A sell-off in financial heavyweights however offset these gains as Maybank fell 16 sen to RM7.34 and Public Bank dropped 52 sen to RM16.18.
Petronas Chemicals was seen sliding 18 sen to RM5.51. In telcos, Maxis shed 12 sen to RM5.01 and Digi slipped 10 sen to RM4.07.
According to Malacca Securities Research, the positive sentiment on the local market is expected to continue owing to stronger-than-expected global economic data.
The impending release of Top Glove's quarterly financial performance could also provide an extension to the upside, it said.
On the technical charts, the research house said the FBM KLCI has formed another bullish candle to strengthen its position above the 200-day simple moving average.
"With the positive momentum taking shape, the immediate resistance is now located at 1,555, followed by 1,580.
"Support, meanwhile, is pegged at 1,500, followed by 1,480," it said.
Meanwhile, crude oil fell after two days of gains as producers in the US took steps to resume output following Hurricane Sally's passage.
US crude was down 478 cents to US$39.68 a barrel and Brent crude fell 44 cents to US$41.78 a barrel.