Southeast Asian stock markets fell sharply on Thursday after a US warning that there was still a long road ahead to resolve trade issues with China, and Washington and Pyongyang failed to reach an agreement. US President Donald Trump said he had walked away from a nuclear deal at a summit in Hanoi with North Korean leader Kim Jong Un because of unacceptable North Korean demands to lift punishing US-led sanctions.
Vietnam stocks were the worst hit, ending 2.5 percent lower as financial and consumer stocks led the decline. No agreement between Washington and Pyongyang was "part of the reason and an excuse to sell", said a Hanoi-based trader, adding that the market had slowed in the past few days after gaining sharply since the Lunar New Year break.
Vingroup JSC, the country's largest listed firm, closed down 2.9 percent and Vietnam Dairy Products JSC dropped 4.5 percent. A contraction in China factory activity in February and US Trade Representative Robert Lighthizer's cautious comments about the prospect of a trade deal with China - the region's largest trading partner - also dampened sentiment across Asia. Philippine stocks fell 2.3 percent with all sectors in the red. Real estate firm Ayala Land Inc fell 1.5 percent, while lender BDO Unibank Inc declined 4.4 percent. Philippine shares lost about 3.8 percent in February, making them the biggest losers in Southeast Asia.
A dip in financial and material stocks pulled Indonesian shares down by 1.3 percent. Indonesia's central bank governor said interest rates could be lower if stability in the financial system was maintained. Bank of Indonesia kept rates on hold last week, but said it was looking at ways to boost loan growth by easing liquidity rules.
Singapore shares fell 1.2 percent with index heavyweight Jardine Matheson Holdings Ltd ending 3.8 percent lower ahead of its annual results, while Jardine Strategic Holdings Ltd lost 1.9 percent. Thai stocks shed 0.7 percent after data showed trade surplus in Southeast Asia's second-largest economy narrowed in January.