Most Southeast Asian stock markets declined on Wednesday on fears of a global trade war after the sudden dismissal of US Secretary of State Rex Tillerson and news that Washington is seeking to impose tariffs on up to $60 billion of Chinese imports. Tillerson was seen as a moderate in President Donald Trump's administration and his departure is seen as a sign of potential worsening of tariffs.
"The movement in regional markets is focused on the shakeup in the Trump administration... the second concern is trade wars after the Trump administration imposed tariffs on steel and aluminium," said Lexter Azurin, a senior equity analyst at AB Capital. "This would pose some concern in terms of the global economy in a broader sense." MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.4 percent, retreating from a 1-1/2-month high hit on Tuesday. In Southeast Asia, Philippine shares fell the most, with all sectors but one in red.
JG Summit Holdings Inc dropped 4.5 percent and SM Investments Corp fell 2.3 percent. These two weighed the most on the benchmark stock index. Indonesian shares were down 0.5 percent, dragged by energy and consumer staples stocks. United Tractors Tbk PT weighed the most on the index, dropping 4.3 percent. An index of the country's 45 most liquid stocks lost 0.5 percent. Malaysian shares fell 0.4 percent, largely due to losses in consumer staples and telecom stocks.
Nestle (Malaysia) Bhd ended 10.4 percent lower after declining as much as 14.7 percent in its biggest intraday percentage loss since December 2007. Across the Johor Causeway, Singapore shares slipped 0.4 percent on broad-based losses. Financials weighed heavily on the benchmark with United Overseas Bank Ltd losing 0.6 percent.
Thai shares recovered from early falls to end 0.2 percent higher. Consumer discretionaries and staples supported the index. Trading store chain operator Siam Makro Pcl gained 6.8 percent. Vietnam shares rose 0.4 percent, helped by financials and utilities. Joint Stock Commercial Bank for Foreign Trade of Viet Nam ended 2.5 percent higher.
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