KUALA LUMPUR: Worries over foreign fund outflows plagued global markets on Friday as US Treasury yields surged to seven-year highs even as the US economy roared ahead, stoking fears of inflation and interest rate hikes.
Key indices in Asia were lower; Japan's Nikkei, South Korea's Kospi and Hong Kong's Hang Seng were down 0.4% each at 12.30pm Malaysian time.
China's markets remained closed for its week-long national holidays.
Back home, the FBM KLCI ended the morning session 7.64 points lower at 1,782.47. Turnover was 1.21 billion shares valued at RM844.75mil. Decliners far outnumbered gainers, 581 to 175, and 314 counters were unchanged.
In Malaysia, the negative sentiment was compounded by August trade data, which showed exports contracting 0.3% from a year earlier, sharply below analyst forecasts.
Telcos were among the leading decliners. Axiata weighed the market, sliding 10 sen to RM4.40 while Maxis dropped give sen to RM5.70 and Digi lost three sen to RM4.72.
This came amid a report by PublicInvest Research that forecast a challenging operating landscape for the sector moving forward given the implementation of the government's Mandatory Standard on Access Pricing.
Among other leading laggards, IHH Healthcare slid eight sen to RM5.11, Tenaga Nasional dropped six sen to RM15.44 and Petronas Gas fell 12 sen to RM18.86.
Only two counters on the KLCI rose in the morning session - Petronas Chemicals rose one sen to to RM9.41 and KLCC Property REIT added one sen to RM7.51.
Oil prices rebounded on Friday, partially retracing some losses from the previous session after major oil producers Saudi Arabia and Russia said they would raise output to make up for some of the expected supply disruptions from Iran.
WTI crude rose 46 cents to US$74.79 a barrel while Brent crude gained 36 cents to US$84.94 a barrel.
In currencies, the ringgit held firm against the US dollar at 4.1462. It rose 0.1% against the Singapore dollar at 3.0007 and slipped 0.35% against the pound sterling at 5.3945.