Southeast Asian stock markets fell sharply on Friday along with global equities amid an escalating trade spat between the United States and China. China urged the United States on Friday to "pull back from the brink" as US President Donald Trump's plans for tariffs on up to $60 billion in Chinese goods brought the world's two largest economies closer to a trade war.
"Hopefully... some agreement is reached between them in the next couple of weeks," said Manny Cruz, an analyst with Asiasec Equities Inc in the Philippines. Singapore shares slumped 2 percent, the most in one-and-a-half months, on broad-based losses, with DBS Group Holdings Ltd declining 2.6 percent.
Philippine shares dropped 1.9 percent to close below the 8,000 level for the second time this week, with consumer cyclicals and telecom services shares the biggest losers. The main stock index dropped 3.3 percent this week, marking its fifth straight weekly fall - the longest weekly losing streak since September 2016.
Heavyweight Ayala Land Inc dropped 3.8 percent, while SM Investments Corp fell 3.2 percent. Indonesian shares closed 0.7 percent lower, partially recovering from an intraday drop of 2.7 percent.
Materials and consumer discretionary stocks weighed the most on the benchmark index. Telekomunikasi Indonesia, the biggest weight on the index, fell 1.1 percent. An index of the country's 45 most liquid stocks dropped 0.9 percent.
Indonesia should be the hardest hit in the region in the event of a trade war due to the export-reliant nature of its economy, said Asiasec Equities analyst Cruz. Malaysian shares fell 0.6 percent, weighed down by financials and telecom services. CIMB Group Holdings Bhd was the biggest drag with a fall of 1.1 percent.
Vietnam shares retreated from an all-time peak set on Thursday, losing 1.6 percent on broad-based losses. The benchmark index also snapped a nine-session winning streak. Financials were the top drags with Joint Stock Commercial Bank for Foreign Trade of Vietnam shedding 2.9 percent. Broader Asian shares outside Japan were 2.2 percent lower.
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