KUALA LUMPUR: Rising US Treasury yields and elevated crude oil prices continue to tighten global financial conditions, sapping investor risk appetite for equities, says Apex Securities.
Amid elevated inflation concerns and heightened market volatility, the US 10-year Treasury yield rose to 4.69%, while the 30-year yield climbed above 5.18%, reinforcing concerns over a prolonged higher-for-longer Fed rate environment.
"Against this backdrop, we expect continued rotation into defensive and value-oriented sectors, while sentiment toward technology and AI-linked names may remain fragile following recent profit-taking in semiconductor stocks," said the research firm in its market outlook.
Within Asia, energy-importing markets such as Japan and Korea could remain vulnerable should oil prices and bond yields stay elevated for longer, it opined.
As for the domestic market, Apex expects the FBM KLCI to remain range-bound pending clearer geopolitical developments and stabilisation in global risk sentiment.
At 9.08am, the FBM KLC was poised for yet another dismal session ahead, falling 7.46 points to 1,719.81. At current levels, the index has erased all the gains made during a tech-inspired rally in the first week of May.
Blue chips succumbing to selling pressure included Nestle down RM1.92 to RM93.12, Hong Leong Bank falling 14 sen to RM21.56 and PPB down 10 sen to RM10.38.
The most actively traded stocks were Skyechip, making its debut on the Main Market with a RM1.72 jump to RM2.60 after 64 million shares traded.
Capital A, which had its Practice Note 17 status uplifted by Bursa Malaysia, rose three sen to 47 sen while Oppstar gained 1.5 sen to 84 sen.
