Southeast Asian stock markets ended lower on Monday with cautious investors across the globe opting for safe-haven bonds as risk assets were rattled by fears of an impending US recession, while Vietnam shares slumped to a near one-month low. Concerns about the health of the world economy heightened last week after remarks by the US Federal Reserve, sending the 10-year treasury yields to the lowest since early 2018.
Meanwhile, data showed preliminary measures of manufacturing and services activity in the United States grew at a slower pace this month than in February, and dampened sentiment further. Traditionally, an inverted yield curve - where long-term rates slip below short-term - has signalled a recession in the offing.
Asian shares followed the broader global equities sell-off, with MSCI's broadest index of Asia-Pacific shares outside Japan dropping 1.5 percent to a one-week trough.
Leading the declines in the region, Vietnam shares closed 1.9 percent weaker, with real estate stocks weighing on the index. Philippines shares ended 1.9 percent lower, with losses in industrial stocks accounting for most of the declines.
Thai shares shed 1.2 percent as the Southeast Asia's second-largest economy awaits the final results of the country's first election since a 2014 coup. Pheu Thai party linked to self-exiled former leader Thaksin Shinawatra won 138 seats, while military junta chief Prayuth Chan-ocha's Palang Pracharat party got 96, but the winners of 150 of the lower house seats are still unclear, the election commission announced after market hours.
The overall winner of Sunday's election may not emerge for weeks because the Election Commission has said it will announce the official results of the final 150 seats in the 500-seat parliament on May 9.
On a separate note, Thailand's annual manufacturing output in February is expected to have risen at a slightly faster pace than in the previous month, a Reuters poll showed.
Singapore shares fell 0.9 percent to their lowest close in nearly two months, after data showed that the city-state's core inflation rate for February eased to 1.5 percent from a year earlier. The rate hit its lowest in nine months on expectations that the central bank will keep monetary policy unchanged when it meets next month. Indonesia stocks closed 1.8 percent weaker, dented by losses in consumer staples and financial stocks, with Gudang Garam Tbk PT slipping more than 4.5 percent.