KUALA LUMPUR (May 25): The FBM KLCI fell 20.12 points or 1.1% to settle at 1,767.38, dragged down by Tenaga Nasional Bhd on rumours the state-controlled utility may acquire 1Malaysia Development Bhd (1MDB)’s power assets.

Besides Tenaga, other major KLCI movers included Petronas Dagangan Bhd and Kuala Lumpur Kepong Bhd. All three stocks were among Bursa Malaysia's leading decliners.

“Due to the political factor, investors panicked, hence, leading to profit taking activities on blue chips,” Interpacific Securities Sdn Bhd senior dealer Sam Ng told theedgemarkets.com

Ng also noted that fund managers were profiting through KLCI-linked put warrants, taking advantage of the index’s fall today.

For comparison, the FBM Small Cap Index fell some 2% today.

Across Bursa Malaysia, 808 stocks ended with losses, while 129 gained. A total of 224 counters remained unchanged. There were 1.86 billion shares worth RM1.91 billion traded.

Top gainers included Dutch Lady Milk Industries Bhd and Perak Corp Bhd. The most-traded counters included Frontken Corp Bhd and AirAsia X Bhd.

Analysts said investors had responded to Malaysia's louder political noise as investigations on 1MDB's financials took centre stage.

The current corporate financial reporting season may also have an impact on local shares, according to them.

“Perhaps it’s the poor results season, but that’s not unusual. It’s been poor for many quarters and years. Perhaps it’s the political noises, but it’s been going on for quite some time as well. But people say the noise is going up a notch and getting louder, but really, it’s anybody’s guess,” an analyst said.

In currency markets, the ringgit weakened to RM3.6145 against the US dollar, but strengthened to RM2.6945 against the Singapore dollar.

Reuters reported that most emerging Asian currencies slid on Monday as rising US inflation and hawkish remarks by Federal Reserve Chair Janet Yellen revived expectations of a US interest rate hike in the second half, cutting the appeal of the region's higher yields.

The KLCI's losses came amid Asian share gains. Japan's Nikkei 225 added 0.7% while Hong Kong’s Hang Seng and South Korea’s Kospi were closed for holidays

Reuters reported that Asian shares edged higher on Monday but gains were capped by concerns that US central bank prepares to raise interest rates for the first time in six years.