Southeast Asian markets at multi-week highs on EU deal optimism

Southeast Asian stock markets gained on Thursday and foreigners were active buyers as a eurozone deal to lower Greece's debt burden and boost the zone's rescue fund increased investors' appetite for risk. AB Capital Securities equities analyst Jose Vistan said the worst-case scenario may have been avoided but the boost to confidence may be temporary.
"It's a relief for everybody and will limit the downside risks. But I don't think it will be a catalyst for the market to sustain the gains as the global economy is going to slow down and there is no short cut to resolve the EU debt crisis." Singapore, outperforming the region, jumped 2.8 percent to a seven-week high led by banks and property shares with the day's trading volume jumping to 1.84 percent of its 30-day average.
MSCI's broadest index of Asia Pacific shares outside Japan was up 3.4 percent by 0959 GMT and MSCI's world index was 1.9 percent firmer. Indonesia ended 2 percent firmer at a six-week closing high, Thailand added 2.31 percent to end at its highest since October 17, Malaysia gained 0.9 percent to an eight-week high and the Philippines rose 1 percent to a five-week high. Indonesia enjoyed foreign inflows of $66.2 million and Manila $12.7 million.
"Foreign investors dominated the overall market," said John Teja, director at Ciptadana Securities in Jakarta. Indonesia's largest lender, Bank Mandiri, gained 4.4 percent and the biggest micro lender, Bank Rakyat Indonesia, added 1.5 percent.Thailand saw net offshore buying of $39.2 million and Malaysia $85.6 million. The day's trading volume in Kuala Lumpur was 1.65 percent of its 30-day average and 1.43 percent in Jakarta.
In Singapore, property firms with exposure to China jumped on hopes that Beijing may loosen policy after Premier Wen Jiabao pledged to maintain appropriate credit growth. Hong Kong Land Ltd and Global Logistic Properties Ltd jumped more than 7 present. Singaporean banks also helped the overall market to gain with top lender DBS rising 2.8 percent and Oversea-Chinese Banking Corp and United Overseas Bank adding 1.9 percent. They report third-quarter results in early November.
In Bangkok, analysts said foreign buying in banks pushed the overall index up, with Siam Commercial Bank Pcl gaining 4.4 percent and Kasikornabank Pcl adding 6.3 percent. "However, the market has still been concerned over flood damages, which are not all priced in," said Teerada Charnyingyong, a senior strategist at broker Phillip Securities in Bangkok. "So, high market volatility is expected.