Most Southeast Asian stock markets closed weaker on Friday, led by Indonesia and Thailand, weighed down by worries over inflation and fears of further monetary tightening by China, analysts said. Thailand fell 0.5 percent on Friday, giving it a weekly loss of 2.5 percent. The stock exchange reported net selling worth $24 million on the day.
Indonesia, the region's best performer last year, fell 0.8 percent, led by mining shares, with a net foreign outflow of $28.7 million. But it rose 3.2 percent on the week, the best performance in the region, after healthy gains over the previous three sessions. Both Jakarta and Bangkok recovered some lost ground after sharp falls of as much as 1.3 percent in early trade. "There was negative sentiment due to fears of monetary tightening by China during the weekend and a knee-jerk reaction to Japan's rating downgrade," said Song Seng Wun, a regional economist at Singapore-based CIMB-GK Research.
Standard and Poor's cut Japan's long-term sovereign credit rating to AA-minus from AA, citing worries that its government debt ratios would continue to rise. Other analysts said they would not be surprised if China tighteneds monetary policy further ahead of its long New Year holiday from the middle of next week.
Malaysia lost 0.3 percent and the Philippines closed 0.5 percent weaker with less than $1 million in foreign inflows. Bucking the trend, Singapore recovered to close 0.3 percent firmer at its highest close since January 19, while Vietnam rose 1.6 percent to a one-week high. In Bangkok, energy shares helped drive down the bourse, led by top oil firm PTT, which fell 1.2 percent. Teerada Charnyingyong, a senior strategist at broker Phillip Securities, said the market trend was still lower and the gains over the past two days were just a mild rebound after sell-offs.
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