Most Southeast Asian stock markets fell in choppy trade on Thursday on fears that Beijing will tighten monetary policy further after reports that inflation in China acceleratedd more than expected in March March inflation accelerated to a 32-month high of 5.4 percent year-on-year, Hong Kong media said on Thursday, a day ahead of the official data release.
Analaysts recently polled by Reuters had predicted it would quicken to 5.2 percent. China's central bank has already increased benchmark interest rates four times since last October and has required the country's big banks to put a record high of 20.0 percent of their deposits with the central bank as reserves to curb inflation. Further policy tightening by Beijing could pressure emerging markets in Southeast Asia and riskier assets in general if investors feel it will slow China's insatiable demand for raw materials and other goods.
Singapore lost 0.4 percent after its Monetary Authority tightened monetary policy slightly to fight against rising inflation, helping push the local currency to record highs, but declines were capped by strong first quarter economic growth. Indonesia fell 0.7 percent to its lowest close since April 4, led by financial shares with $35.7 million of foreign outflows.
Malaysia closed 0.6 percent weaker at a two-weak closing low, but enjoyed a $25.2 million net foreign inflow, while Vietnam edged down 0.1 percent. In Jakarta, Asia's biggest thermal coal exporter Bumi Resources fell 1.5 percent after it said it was in talks with China Investment Corp (CIC) on the possible swap of $600 million debt into equity. Bucking the weak regional trend, the Philippines benchmark share index gained 0.7 percent to a near one-weak high, helped by property shares with over 1.8 percent gain in Ayala Land.