Southeast Asian stock markets tumbled on Friday, with Indonesia suffering its biggest loss in more than 2-1/2 years and Singapore its biggest in over two years as investors sold big-cap and commodity stocks. The falls came in strong volume and foreign money flowed out as worries about a possible slide back into recession in the United States and Europe's debt crisis prompted investors to get out of risky assets.
Indonesia's weekly loss was 5.1 percent, Southeast Asia's second-worst after Singapore's 6.1 percent. Thai stocks finished down 2.7 percent on the day, with a weekly loss of 3.5 percent. Malaysia and the Philippines fell more than 1 percent on the day and week. However, authorities in the region argued that strong domestic economies could weather the global turbulence. Indonesian President Susilo Bambang Yudhoyono said there was no need to panic over the sharp drop in the local stock market and that the country was better prepared than in 2008 to face any global crisis.
Bank of Thailand Governor Prasarn Trairatvorakul said the Thai economy could still achieve or even exceed a 4.1 percent growth target this year. Investors waited for key US economic data later on Friday for further leads, brokers in the region said. "The index will continue to decline next week but it could start to rebound in two weeks if the US comes with a better stimulus package," said Norico Gaman, head of research at brokerage BNI Securities in Jakarta. Bucking the trend, stocks in Vietnam climbed 1.2 percent, adding to a 1.2 percent rise on Thursday, as blue chips extended gains, including Masan Group and Bao Viet, amid foreign-led buying.
The Philippine stock market reported $13 million in foreign outflows on Friday, after $5.7 million in outflows on Thursday, while Indonesia had $145 million in outflows after $130 million over the previous two sessions. The Thai market registered $204 million in foreign outflows on Friday. However, since the July 3 general election to Thursday, the market has still gained $1.34 billion in inflows.
Among losers, Astra International, Indonesia's biggest listed firm and main auto distributor, dropped 4.6 percent and shares in Singapore Telecommunications sank 7.8 percent on its ex-dividend date. Malaysia's CIMB Group fell 1.3 percent, refiner Thai Oil plunged 5.8 percent and Philippine Ayala Land lost 2.4 percent. Singapore-listed commodity trading firm Noble Group tumbled 6.9 percent, hit by concerns that a slowdown in the global economy would hurt its earnings.
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