Major Southeast Asian stock markets fell on Thursday for the third day, led by banks and commodities as a decline in Chinese factory output added to worries about the global economy and Europe's debt crisis. China's factory output shrank again in December after new orders fell, a preliminary purchasing managers' survey showed, entrenching expectations that manufacturers are struggling with waning global demand and tight domestic credit conditions.
Indonesia fell 1.3 percent to its lowest since November 29, Singapore lost 1.4 percent to a 10-week closing low, the Philippines edged down 0.1 percent and Vietnam, the region's smallest bourse, dropped 0.8 percent to its lowest close in more than 2-1/2 years. Thailand and Malaysia, bucking the trend, edged up 0.1 percent.
Jakarta suffered a net foreign outflow of $73.9 million and Kuala Lumpur saw $13.9 million leave. Manila enjoyed a net inflow of $28.3 million. Traders in Singapore said there were concerns about higher counterparty risk for Singapore lenders after Fitch Ratings downgraded five major European banks.
Shares in Singapore's United Overseas Bank and DBS Group closed down 2.8 percent and 2.1 percent respectively, while Oversea-Chinese Banking Corp lost 1.3 percent. In Bangkok, energy and banks pulled the market down, although it recovered in the final hour. In Jakarta, blue chip stocks fell, with Indonesia's biggest car maker, PT Astra International, slumping 4.1 percent, government-controlled PT Gas Negara slipping 2.4 percent and cigarette producer PT Gudang Garam easing 2.3 percent. In Kuala Lumpur, analysts said investors were extremely cautious and were favouring companies paying decent dividends, plus gold.