Southeast Asian stocks fall; Malaysia slumps most in nearly a decade

Southeast Asian stock markets fell on Wednesday, with Malaysia posting its sharpest drop in nearly a decade, amid a global selloff provoked by the political crisis in Italy and renewed US-China trade war fears. Investors fear that repeat elections in Italy, which could come as soon as July, may become a de-facto referendum on Italian membership of the currency bloc and the country's role in the European Union.
However, reports that two anti-establishment parties were again renewing efforts to form a government rather than force the country back to the polls, helped ease investor woes. Meanwhile, China said it would safeguard its interests after Washington said it will release a list of some $50 billion worth of Chinese goods that will be subject to a 25 percent tariff by June 15, unless Beijing addressed issues of theft of American intellectual property.
Malaysian shares slumped 3.2 percent to their lowest close since December 2017, dragged by financials and trading services firms, while Indonesian stocks fell nearly 1 percent, snapping five straight sessions of gains. Indonesia's central bank raised its key interest rate for the second time in two weeks, and flagged more possible hikes in an effort to boost the fragile rupiah and contain capital outflows.
Telekomunikasi Indonesia (Persero) Tbk Perusahaan Perseroan PT fell 2.4 percent, while Astra International Tbk PT shed 2.4 percent. Among other Southeast Asian stock markets that fell, Singapore closed more than 2 percent lower, dragged by financials, while the Philippines declined 1.7 percent, extending falls into a fourth session. All markets except the Philippines and Vietnam were closed on Tuesday.