Most Southeast Asian stock markets fell on Tuesday on fears that any fresh credit rating downgrades in Europe will deal a fresh blow to financial markets and the cooling global economy. Optimism over last week's European Union agreement on tougher fiscal discipline quickly evaporated after Fitch Ratings said on Monday that leaders had failed to come up with a comprehensive solution to the debt crisis, thereby increasingly short-term pressure on the debt ratings of eurozone countries.
"We don't see any near-term solution in Europe, or at least one that will satisfy the market. The recent agreement that they made is very broad, there weren't any specifics," said Carey Wong, an analyst at OCBC Investment Research. Indonesia's benchmark share index fell 0.8 percent, Singapore 0.6 percent, Thailand 0.3 percent and Malaysia 0.1 percent. Vietnam also lost 1 percent.
The Philippines was the only regional market to buck the global downdraft, edging up 0.2 percent. Except Jakarta and Hanoi, all other markets saw thin trade compared to their 30-day average volume as continued market uncertainty and the approach of the year-end convinced investors to stick to the sidelines.
Jakarta saw net foreign selling of $87.3 million, the highest since November 10, while Manila saw a $0.2 million foreign outflow, though Kuala Lumpur received a $3.6 million inflow. In Singapore, Oversea-Chinese Banking Corp fell 1.3 percent, commodities firm Olam International lost 0.9 percent, and shopping mall owner CapitaMalls Asia slumped 2 percent.
In Kuala Lumpur, Malaysian gaming and property company Genting Bhd and financial CIMB Group Holding Berhad led falls with losses of more than 1.5 percent each. Property firms helped boost Manila shares, however, with Philippine mall developer SM Prime Holdings Inc rising 2.6 percent.