Most Southeast Asian stock markets fell on Friday, with Indonesia and Philippines dipping more than 10 percent off historical highs at one point as disappointing US earnings and fears of further monetary tightening in China turned sentiment sour.Malaysia's KLCI Index slid 1.22 percent, the biggest one-day drop in more than eight months, while the main indexes in Indonesia and the Philippines dropped more than 10 percent.
"It's basically pent-up selling as we were closed yesterday," said an institutional dealer at a bank-backed brokerage in Kuala Lumpur. The Malaysia market had rallied 3.13 percent until Thursday. Vietnam was the only market to close in positive territory on Friday, up 1.47 percent at 519.50. The index has risen more than 7 percent this year.
Indonesia dropped more than 4 percent at the open before closing down 2.16 percent, the retreat led by consumer-related and commodities stocks, including PT Unilever Indonesia down 6.6 percent and coal miner Bukit Asam off 6.4 percent.
Foreigners have rotated funds out of high-inflation-risk economies such as Indonesia and into developed markets such as Japan this year and inflows into emerging market local currency bond funds, a favourite last year, have slowed considerably. Foreign funds mostly flowed out of the region on Friday, with Indonesia seeing $114.6 million leave the country, Thomson Reuters data showed. Philippines stocks saw $19 million in foreign money flow out, partly reversing $55 million inflows on Thursday.
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