Most Asean stocks drop on signals of smaller US rate cut

BENGALURU: Most Southeast Asian stock markets started the week on the backfoot with Philippines leading the declines, as investors pulled money out of risky assets due to reduced odds of a double-barrelled U.S. interest rate cut later this month.

Equities worldwide benefited last week from New York Fed President’s dovish comments that hinted at a half-point rate cut this month, but hopes were thwarted when his speech was recanted and qualified as “academic” rather than a policy suggestion.

Wall Street Journal’s report on Friday that the U.S. Federal Reserve was likely to cut rates by 25 bps dashed expectations further.

Markets “will likely trade with a more risk cynical bent this week as the less dovish Fed narrative continues to sink in” said Stephen Innes, managing partner at Vanguard Markets, in a note.

Leading the declines, Philippine shares posted their sharpest intraday drop in over three weeks, dented by financials and utility stocks. The biggest laggards in the index – Bank of the Philippine Islands and power generator Aboitiz Equity Ventures Inc lost more than 2% each.

The Singapore index also edged lower, with real estate giant Capitaland Mall Trust falling 1.5% and lender United Overseas Bank Ltd shedding 1.1%.

Indonesian shares dropped most in nearly two weeks with losses being dominated by consumer stocks. Unilever Indonesia Tbk PT dropped 1.3%, while the country’s second-largest cement maker Indocement Tunggal Prakarsa Tbk PT shed 1.4%.

Meanwhile, Thai shares dipped shortly after data showed the country’s customs-cleared exports declined for a fourth straight month in June, down 2.15% from a year earlier, while imports also contracted for the period.

Losses mainly stemmed from the industrial sector as Bangkok Expressway and Metro PCL subsided 2.7%, while Airports of Thailand PCL traded 1% lower.

Malaysian shares shed previous session’s gains to edge 0.3% lower as losses in telco and financial sectors weighed. Telecom services provider Maxis Bhd skid 1.2%, while lender CIMB Group Holdings Bhd declined 1%.

Bucking the trend, the Vietnam benchmark index edged a tick higher.- Reuters

Source: TheStar