Most Southeast Asian stock markets lost ground on Tuesday after ratings-agency Standard & Poor's downgraded the US credit outlook to negative, but Thailand and Indonesia bucked the trend as some investors scouted for emerging-market bargains. Singapore ended down 0.6 percent at its lowest close since April 1.
The Philippines shed 0.6 percent; Malaysia fell 0.4 percent to a three-week low, led by financials with volume slumping to 0.85 times its 30-day average, while Vietnam fell 0.4 percent. Standard & Poor's threatened on Monday to downgrade America's triple-A credit rating unless the Obama Administration and Congress find a way to slash the yawning federal budget deficit within two years.
"The regional countries are fundamentally strong but unfortunately they are also tied up with how the world's largest economy is doing," said Song Seng Wun, a regional economist at Singapore-based CIMB-GK Research. Singapore Exchange, which posted a 10.2 percent drop in quarterly net profit, fell 1.6 percent.
Thailand , the region's best performer, gained 0.5 percent to its highest close since September 1996 on earnings hopes with the day's volume 1.05 times its 30-day average. KGI Securities recommended investors bargain hunt in large-capitalised stocks, viewing the US rating issue as short-term. Bangkok saw thin foreign inflows of $4.8 million, the Stock Exchange data showed, while Jakarta and Kuala Lumpur saw light foreign outflows of $25.2 million and $4.5 million respectively.
Indonesia also bucked the trend, edging up 0.2 percent with trading volumes slightly down from its 30-day average. The country's biggest telecommunications firm Telekomunikasi Indonesia (Telkom) rose 4.1 percent after announcing a $346 million share buy-back plan.
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