Major Southeast Asian stock markets fell in thin volume on Monday, led by financials, plagued by China's latest attempt to contain inflation that added to caution about monetary tightening in the region. Many investors were happy to stay on the sidelines ahead of a eurozone finance ministers' meeting later in the day at which there may be an agreement to beef up the zone's rescue fund.
Indonesia's main share index closed almost 1 percent lower, ending a three-day winning streak. Jakarta's slide came in low volume of just over half its 30-day average and with $13 million in foreign outflows, on top of $404 million last week, Thomson Reuters data showed. Even a ratings upgrade from Moody's for Indonesia's sovereign debt failed to lift sentiment.
One Jakarta-based trader said the worries there were more about inflation than interest rate rises because some investors were concerned that Indonesia's central bank might be delaying action too long. Markets in Singapore and Thailand posted small losses, while stocks in Malaysia, the Philippines and Vietnam gained, although volume in each fell short of the 30-day average.
Shares in Asia excluding Japan fell 0.67 percent by 0906 GMT, with a steep fall in Chinese stocks spooking other Asian markets. Losses in Chinese financial stocks after China's central bank raised banks' required reserves had some negative effect on financial stocks in the region, dealers said. PT Bank Rakyat Indonesia, the country's second-largest bank by assets, ended down almost 2 percent and Thailand's third-ranked Kasikornbank lost almost 3 percent. Shares in Singapore lenders extended recent losses after the government introduced more measures to cool home prices, which dampened the outlook for loan growth. Top lender DBS Group Holdings fell 0.5 percent.
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