Singapore stocks shed more than 3 percent to a two-year low on Tuesday and Indonesian stocks fell more than 2 percent as growing doubts over Greece's ability to avert a debt default prompted further selling of stocks and other risk assets.
The sell-off, which picked up pace in late trading, was led by banking stocks as the prospect of a Greek default raised concerns about another global financial crisis.
Singapore's Straits Times Index finished down 3.5 percent, its biggest loss in more than six weeks. Thai stocks ended down 1.6 percent and were down nearly 3 percent at one stage at their lowest in 14 months. Indonesia fell 2.4 percent and Malaysia was off 0.5 percent. The Philippines and Vietnam each fell 0.93 percent.
The region had a choppy session dominated by short-term traders. In Bangkok, short-sellers played a part in the fall. "It's one-way trading at the moment, everybody just really wanted to sell. It's a lot of domestic trading of stocks. I think it's overdone," said Andrew Yates, head of international equity sales at Asia Plus Securities in Bangkok.
Foreign flows were mixed across markets. Indonesia had $52 million in foreign outflows, followed by Malaysia's 45 million ringgit ($14 million), according to Thomson Reuters and stock exchange data.
But Manila took in $26 million in foreign money and Bangkok 448 million baht ($14.4 million). Emerging stocks fell 2 percent on the day to hit a fresh two-year low on Tuesday and world stocks dropped nearly 1.5 percent to their lowest since July 2010. Local institutions bought 34.5 million ringgit ($10.8 million) of stocks in Malaysia, stock exchange data showed. A Kuala Lumpur stock trader cited optimism about government spending ahead of the 2012 budget on Friday.
Thai Deputy Prime Minister Kittirat Na Ranong expected Thai market volatility to continue in the near term due to concerns about the eurozone's debt problems and the Thai stock exchange said it might consider support measures. SET President Charamporn Jotikasthira said: "If share prices fell below book values to a certain extent, we may look to do something."
Thai stocks trade at 1.7 times their book value against Indonesia's 3.17 times and the Philippines' 2.27, according to Thomson Reuters data. The Thai bank sector subindex slid 4.7 percent to 15-month lows amid concern about the impact of slowing global growth on the domestic economy and banking business. Siam Commercial Bank and Kasikornbank each tumbled more than 6 percent. Singapore's DBS Group Holdings fell 6 percent and Indonesia's top lender, Bank Mandiri, fell 3.5 percent.
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