Malaysian shares closed in the red zone on Wednesday, extending losses of the previous session, as investors remained cautious ahead of Bank Negara's lending policy rate decision due tomorrow.

The FTSE Bursa Malaysia KLCI, the main gauge of Malaysian stocks, shed 5.47 points to end 0.36% lower at

1,531.51. The day ranged between 1,527.92 and 1,535.20.

In economic news, Standard Chartered Research expects Bank Negara Malaysia to hold the overnight policy rate (OPR) steady at 3% at its monetary policy committee meeting tomorrow.

In corporate news, shares of the cement producer Hume Cement Industries (KLSE:HUMEIND) dropped nearly 6%, and those of the banking group AMMB Holdings (KLSE:AMBANK) were down by 5% recently.

Meanwhile, shares of the carpet maker Paragon Union (KLSE:PARAGON) fell 3% on Wednesday's close.