Major Southeast Asian stock markets fell more than 1 percent on Friday as a massive earthquake hit Japan and fuelled late selling in markets already jittery about the unrest in oil-producing countries. Southeast Asian exporters to Japan were among the losers, worried about this latest setback to Japan's economy, while airline firms fell on fears of a drop in tourist numbers.
Most regional markets posted losses for the week, reversing last week's gains, as investors worried that the spike in oil prices would increase inflationary pressure and hurt emerging economies. Other Asian markets fell, too. The MSCI ex-Japan index was down 1.45 percent while emerging market stocks were 1.04 percent lower at 0948 GMT.
Singapore's main share index hovered around two-week lows, with most others around a one-week low. A tsunami warning has been issued for the entire Pacific basin, including Indonesia and the Philippines, following the Japanese earthquake. "The earthquake in Japan brings more negative market sentiment," said John Teja, director of Ciptadana Securities in Jakarta.
"In general, I see a limited impact overall on stocks in Indonesia. However, it might affect resources and commodity stocks. Some listed resources stocks export heavily to Japan." PT Bumi Resources, Asia's largest thermal coal exporter, fell 1.6 percent and PT Indo Tambangraya Megah, its third-biggest coal miner, lost 2.3 percent.
Singapore Airlines, the world's second most valuable carrier, eased 1.6 percent, Malaysian national carrier Malaysian Airline System dropped 2.1 percent and Thai Airways International plunged 4.2 percent. In Bangkok, optimism about a general election to be held in mid-year helped the market recoup some of its losses. Prime Minister Abhisit Vejjajiva said parliament would be dissolved by the first week of May, paving the way for the election by early July.
"I think the market was already prepared for a June election so there should not be much of an impact. The news of the earthquake in Japan this afternoon sent all markets lower and the SET is no exception," said Bangkok-based Andrew Yates, head of International Equity Sales at broker Asia Plus Securities.
"I think external factors will continue to influence the market's direction next week but 1,000 is now a support level and we look to be holding above this level." Bangkok's SET index closed at 1,007.06 on the day. Elsewhere, Malaysia's central bank lifted bank reserve requirements on Friday but kept interest rates on hold, while signalling that a rise could be on the cards as food and fuel inflation force a tightening across much of Asia.