Southeast Asian stock markets pulled back on Tuesday as big caps and commodity stocks gave up recent gains on concern about prospects for Europe to contain its debt crisis and a slowdown in Chinese growth. The selling that ended the region's rally of the past week came in light trading volume. Short-term traders and trading portfolios that dominated recent buying appeared to cash in quick gains, traders said.
Jakarta's Composite Index (JCI), which closed down 2.9 percent at 3,622.03, had plunging nearly 4 percent at one stage. "It's partly due to profit taking and partly from panic selling. For short-term investors, the gain is already high after the rally in the past week," said Jakarta-based Teddy Dwitama, analyst at broker OSK Nusadana.
Jakarta reported a modest $3.8 million in foreign outflows, after inflows on Monday and last week of $18.7 million and $218 million, respectively, Thomson Reuters data showed. The Philippine market took in $5.9 million inflows, data showed. Technically, the JCI's recovery off the September 26 low of 3,217 should eventually rise to the August/September peak at the 4,019-4,028 area, with key short-term support for this recovery leg is at 3,579, broker CLSA said in a research note.
Other share markets still hovered well above their recent lows hit in late September to early October when sell-offs hit across the region. Stocks in Singapore, Thailand and Malaysia each fell almost 2 percent on Tuesday while the Philippines and Vietnam were down more than one percent.
World stocks retreated, echoing losses in Asian stocks and commodities after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem and following a warning on France's triple-A sovereign credit rating. The MSCI's world index was down 0.93 percent while the MSCI's broadest index of Asia Pacific shares outside Japan was down 3.1 percent by 1000 GMT.
Among actively traded stocks, Singapore's oil rig maker Keppel Corp Ltd fell 4.4 percent, one of the hardest hit in the Straits Times Index, as investors took profit from cyclical stocks that were more volatile and oil prices fell. In Bangkok, Thai Reinsurance Pcl plunged 8.4 percent on concerns that flood damage claims would hit earnings and it may need to raise capital. Indonesian property company PT Sentul City Tbk fell 1.7 percent, after a surge of more than 5 percent on speculation over development plans.