Oil Price Surge and Elevated Yields Drag Down Bursa Malaysia

Bursa Malaysia's benchmark index ended lower on Thursday, weighed down by moderate selling pressure and buying activity. The FTSE Bursa Malaysia KLCI (FBM KLCI) eased 4.12 points, or 0.24 per cent, to 1,672.31, from Wednesday's close of 1,676.43.

The market breadth was negative, with losers outpacing gainers 677 to 436, while 542 counters were unchanged, 1,246 untraded and 27 suspended. Turnover widened to 3.32 billion units worth RM2.74 billion from 3.20 billion units valued at RM2.99 billion on Wednesday.

IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan attributed the decline to renewed hikes in oil prices and elevated global bond yields. Benchmark Brent crude futures for November jumped as much as 3.3 per cent to US$106.50 per barrel before paring some gains.

According to Mohd Sedek, the rise in oil prices added to concerns that higher energy costs could reinforce inflationary pressures and keep interest rates higher for longer. Regionally, equities also came under pressure as bond yields remained near two-decade highs, weighing on equity valuations.