BANGKOK, Aug 16: Southeast Asian stocks fell on Friday, led down by Indonesian shares, as concerns about an early tapering of the U.S. Federal Reserve’s monetary stimulus and rising global risk aversion hit regional heavyweights, including banking shares.
Jakarta’s Composite Index dropped 1.5 percent, and is on track for a third straight week of decline. Banking stocks, a key holding among foreign investors, led the falls, with trading most active in PT Bank Rakyat Indonesia Persero Tbk .
Also contributing to the decline in banking shares was the decision by Indonesia’s central bank to cut the ceiling on the loan-to-deposit ratios of commercial banks to 92 percent and its plans to increase the secondary minimum reserve requirement for rupiah deposits to 4 percent.
The Philippine main index fell 0.8 percent, extending Thursday’s 1.1 percent loss and further trimming its gains for the week.
Market players took profits in recent gainers, with shares in Metro Pacific Investments Corp, the top percentage decliner on the main index, slipping nearly 3 percent.
Weaknesses in other regional markets were capped in light volume and due to technical-led buying.
Singapore’s Straits Times Index was down 0.6 percent after losing as much as 1.3 percent earlier, its lowest since July 9.
Malaysia and Thailand shares trimmed most of their earlier losses, but were still in negative territory, while Vietnam pared earlier falls to rise 0.3 percent.
A Bangkok-based strategist at Maybank Kim Eng Securities saw support for the Thai benchmark SET index at 1,440. The index was at 1,448 near the midday break.
Aside from the weak global sentiment, investors were cautious ahead of domestic factors next week.
Thailand will release its second quarter GDP next week and its parliament will debate a borrowing bill for a 2 trillion baht investment on infrastructure.
The broker said these would be the key variables influencing Thailand’s economic growth for the rest of the year. (AGENCIES)
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