Southeast Asian stock markets were mostly steady to slightly higher on Thursday despite jitters caused by a Moody's warning about a possible downgrade of its US credit rating that pushed investors towards safe havens such as gold. Trading volume was generally thin amid continued caution about the eurozone debt crisis, although such worries have not stopped Indonesia, Malaysia and the Philippines, setting record highs this month.
Stocks in Singapore and Thailand ended flat. Thai turnover was just below its 30-day average as investors wound down ahead of a three-day holiday weekend. Investors sought companies with high dividend yields and expected to release strong earnings as the reporting season gets under way this month, brokers in the region said.
"External factors should continue to drag down regional sentiment, including the euro debt issue, which is a long-term problem," said Viwat Techapoonphol, senior strategist at broker Tisco Securities. But he added: "Overall, we see good demand in the earnings season, especially stocks whose prices have lagged."
The dollar fell on Thursday, sending gold to a record high, after Moody's warning on its US credit rating, but resilience in US Treasuries suggested investors expected lawmakers to ultimately raise the county's debt ceiling in time to avoid default. By 0926 GMT, the MSCI index of Asia excluding Japan was practically unchanged while the MSCI index of Southeast Asia inched up 0.40 percent.
Indonesia gained mild inflows of $4.7 million after $29.4 million outflows in the previous two sessions, according to Thomson Reuters data. Thailand had $30.7 million in inflows after $120 million in outflows in the previous three sessions, the exchange said.
Banks advanced on expectations of strong results. Financial firms are among main beneficiaries of an expanding domestic economy.
Bank Mandiri, Indonesia's largest lender, jumped 2.6 percent and Metropolitan Bank & Trust Co, the Philippines' second-biggest lender by assets, surged 3.6 percent. Thai telecoms stocks, which are expected to pay high dividends, advanced. Total Access Communication, Thailand's second-largest mobile phone operator, was up 1.35 percent.