KUALA LUMPUR (March 4): The FBM KLCI settled down 8.32 points or 0.52% at 1,580.13 at Bursa Malaysia’s afternoon break today on profit taking and as rising US bond yields dented global shares amid investors' bet on the rise in US inflation due to a Covid-19 vaccine-driven recovery in the world’s largest economy. 

Such inflation sentiment led to expectations of higher US interest rates. In theory, higher interest rates do not bode well for equities.

The KLCI fell today on profit taking after rising 18.58 points or 1.2% yesterday to close at the day's high of 1,588.45.

Across Bursa today, 5.614 billion securities valued at RM2.864 billion were traded. There were 363 gainers and 715 decliners.

Notable decliners included Malaysian Pacific Industries Bhd (MPI), Nestle (Malaysia) Bhd and ViTrox Corp Bhd.

Meanwhile, notable gainers included Dataprep Holdings Bhd, MSM Malaysia Holdings Bhd and Yinson Holdings Bhd.

Among the notable stocks, MPI settled down 76 sen or 1.82% at RM41.04, Nestle fell six sen or 0.43% to RM137.40, MSM rose 20 sen or 16.13% to RM1.44 and Yinson added five sen or 0.94% to RM5.35.

On Yinson, Kenanga Investment Bank Bhd analyst Steven Chan wrote in a note today that the research firm maintained its "outperform" call on the stock with a target price (TP) of RM6.95.

"Yinson has secured a 25-year solar power purchase agreement (PPA) in Nokh Solar Park in Rajasthan, India, with a contract value of 27.5 billion Indian rupees (about RM1.5 billion) based on 2.25 Indian rupees/kWh. We are positive on the PPA, reaffirming Yinson’s commitment to its renewable energy expansion, with this being its second solar project in India,” Chan added.

Globally today, it was reported that resurgent worries about rising US bond yields hit global shares today as investors waited to see if US Federal Reserve (Fed) chair Jerome Powell will address concerns about the risk of a rapid rise in long-term borrowing costs.

It was reported that benchmark 10-year US Treasuries rose to 1.477% as investors bet US inflation could pick up as an economic recovery gathers steam, driven by government stimulus and further progress in vaccination programmes.

It was reported that the spectre of higher US bond yields also undermined low-yielding, safe-haven assets, such as the yen, the Swiss franc and gold.

"The MSCI's ex-Japan Asian-Pacific shares lost 1.7% in early trade, while Japan's Nikkei fell 1.9%. E-mini S&P futures slipped 0.4%, while the futures for the Nasdaq, the unequivocal leader of the post-pandemic rally, fell 0.6% to a two-month low,” Reuters reported.

"It is not clear how the Fed wants to deal with bond yields," Hirokazu Kabeya, the chief global strategist of Daiwa Securities, was quoted as saying.

"The pace of rises in yields has been far faster than most people have expected, and there's speculation the authorities may be starting to think about tightening their policy,” Kabeya said.