SE Asia Stocks-Most fall on US rate hike worries, weak China factory data

SINGAPORE: Most South East Asian stock markets fell on Wednesday as the US Federal Reserve chairman's comments brought back fears of faster interest rate hikes in the United States, and weak manufacturing data from China and Japan revived worries about global growth.

Fed Chairman Jerome Powell expressed optimism about the US economy on Tuesday and said recent data had strengthened his confidence on inflation, prompting increased bets that the US central bank will squeeze in a fourth rate hike this year.

Although Asian markets are quite sensitive to US rate increases, strong economic growth in the region is expected to attract steady inflows, said Manny Cruz, an analyst with Asiasec Equities Inc in Manila.

Data released earlier on Wednesday showed growth in China's manufacturing sector in February slipped to the weakest in over 1-1/2 years, resurrecting concerns of a sharper-than-expected slowdown in the world's second biggest economy.

China is one of the biggest trade partners of Southeast Asian nations.

MSCI's broadest index of Asia-Pacific shares outside Japan sank 1.1 percent after Wall Street suffered on Tuesday its biggest drop since a selloff three weeks ago.

Philippines shares declined 1.4 percent, the most among regional markets, with industrial and real estate stocks leading the fall.

Conglomerate SM Investments Corp dropped 3.1 percent, while Ayala Land Inc dipped 3.3 percent.

Singapore shares fell 0.6 percent, extending their decline into a second session, dragged almost entirely by financials.

DBS Group Holdings, the city-state's biggest stock by market capitalisation, fell 1.2 percent and accounted for most of the decline, while Oversea-Chinese Banking Corp Ltd slipped 2 percent.

Malaysian shares fell 0.8 percent with AMMB Holdings Bhd shedding 8.8 percent after the company reported a 30 percent drop in quarterly net profit.

Thai shares were flat with energy and utilities accounting for most of the decline. PTT PCL declined 1.1 percent, while Siam Cement PCL fell 0.8 percent.

Thailand's annual industrial output slightly beat expectations as it rose for a third straight month in January, helped by higher production of cars, petroleum and rubber products.