Southeast Asian stock markets retreated on Friday as investors became nervous ahead of US job data later in the day but they ended the first week of the year with modest gains.

Non-farm payrolls due later on Friday are expected to show 150,000 jobs were added in December.

If the figures come in as expected, near-term market sentiment could tip to positive.

Singapore's stock market ended flat but it posted a 2.6 percent rise for the first week of the year, leading others in the region.

The Straits Times Index lost 17 percent last year, Southeast Asia's second-worst performance after Vietnam.

Indonesia fell 0.9 percent on Friday, the Philippines was down 0.8 percent, and Thailand and Malaysia ended flat.

Vietnam fell for a fourth session, ending down 1.23 percent.

According to Thomson Reuters StarMine, Singapore is trading at 11.9 times this year's projected earnings, with Vietnam at 8.3 times, Thailand 11, the Philippines 13.3, Malaysia 13.8, Indonesia 13.6 and the whole of Asia at 10.6.

Funds started the year showing good buying interest, taking the view that share prices were cheap compared to corporate profits.

In the short term, however, stock prices might tread water due to headwinds in Europe's banking and debt crisis.

"Funds seem to have high cash positions because they have underweighted risk assets for a while due to the debt crisis in Europe," said Viwat Techapoonphol, strategist of Tisco Securities in Bangkok.

"The downside risk to risk assets and equities is more limited at this point as the worst of the Europe issue might have been largely priced in by markets at this level." Financial shares were generaly weak, partly due to profit taking, while energy shares outperformed on Friday, supported by the firm global oil market.

Indonesia's PT Bank Rakyat Indonesia Tbk was down 0.7 percent, after a gain of nearly 3 percent in the previous four sessions, while Malaysia's Petronas Chemicals Group Bhd eased 0.8 percent, erasing part of the 2.9 percent gain earlier in the week.

In Bangkok, banking shares edged up 0.4 percent as investors bought back shares sold earlier this week because of the prospect of higher levies on deposits.

Copyright Reuters, 2012

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