Banking shares helped boost stock markets in Indonesia, Malaysia, and Thailand on Tuesday on hopes for eurozone recovery but others fell as investors cautiously waited to see strong steps taken in Europe. Optimism over eurozone recovery hopes has been eroding with investors stayed in the sidelines as Europe's finance ministers try to agree on how to bolster the European Financial Stability Facility bailout fund in a bid to stem contagion in bond markets.
Malaysia gained 0.9 percent with a $32.2 million foreign inflow and Indonesia jumped 1.1 percent with a net foreign buying of $27.4 million, while the Philippines saw net foreign buying of $27.9 million, its highest since August 9, even though the market fell 0.4 percent. Thailand, which ended 0.4 percent firmer saw net foreign buying of $16.9 million. Singapore closed 0.2 percent weaker as investors took profits. Vietnam edged down 0.1 percent.
On Monday, analysts said investor sentiment was dented after speculation over an Italy bailout by the International Monetary Fund proved to be wrong. Except Jakarta, all other markets saw trading volume on Tuesday that topped 30-day averages with Malaysia's volume hitting 1.45 times and the Philippines seeing 1.33 times its 30-day average.
Banks led regional markets on hopes of strong credit growth. Malaysia, which was closed on Monday for a holiday, saw financials AMMB Holdings Bhd and CIMB Group Holdings Bhd, considered proxies of the broader market, jumping 5 percent and 4.6 percent respectively.
Indonesia's largest lender Bank Mandiri gained 2.3 percent and Bank Central Asia, Indonesia's biggest lender by market value, rose 2 percent, Bangkok's Siam Commercial Bank adding 3.8 percent and Singapore's DBS rose 0.9 percent. MSCI's broadest index of Asia Pacific shares outside Japan was up 1 percent at 1017 GMT.
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