Southeast Asian stock markets fell in thin volume on Monday, led by market big-caps, as concern about US growth prospects and the possible impact on regional exports dented sentiment. Singapore shares hit their lowest in almost two weeks and Thai stocks were at two-month lows. Stocks in Indonesia and others were trapped in range-trading but ending in negative terrain.
--- Indonesia, Malaysia see reversal of recent inflows
Market players are also watching for moves by policymakers in the region to cope with rising inflationary pressure, including an Indonesian central bank meeting later this week. Indonesia's main share index edged down 0.3 percent on Monday. Future inflation seemed to be the main worry.
"We expect the central bank to maintain its benchmark rate at its meeting later this week, particularly as inflation has remained relatively subdued in May," said Harry Su, Head of Research at Bahana Securities in Jakarta. "We are concerned that July/August inflation could spike up after China's drought, which is supposed to be the worst in 50 years ... We retain our view that Bank Indonesia would have to raise interest rates at least once more in the third quarter."
Indonesia reported $30 million of foreign outflows on Monday, after $112 million in inflows last week, Thomson Reuters data showed. Malaysia posted $30 million in outflows after $392 million in inflows last week while Thailand had $37.9 million in outflows, adding to last week's $149 million, the exchange said. The outlook for Thai stocks, Southeast Asia's worst performers last week, is clouded by political uncertainty ahead of a general election set for July 3.
Southeast Asia's weakness came in low volume of just two-thirds the 30-day average, with some big Asian centres shut for holidays, including China, Hong Kong , South Korea and Taiwan. The weakest US jobs growth in eight months in May knocked the dollar lower and pushed Japanese stocks down to a two-month low, as investors took the view that the global business cycle had shifted to slower growth and a defensive stance in portfolios was now desirable.
Asian stocks outside Japan were little changed, inching up 0.01 percent by 0955 GMT, while the MSCI index for Southeast Asia was down 0.76 percent. For most bourses, losses were led by market heavyweights, including a 0.95 percent fall in Singapore Telecommunications, Southeast Asia's biggest telecom firm, and a 1.9 percent drop in Thailand's biggest lender, Bangkok Bank. Airline stocks were also weak, bracing for lower 2011 forecasts at a major conference this week as fears grow over the global economy. Singapore Airlines Ltd, Southeast Asia's biggest airline by market value, eased 0.4 percent. Air Asia fell 0.3 percent and Thai Airways International 2.2 percent.
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