(Dec 5): Southeast Asian stocks fell on Wednesday, in line with global markets, as a flattening U.S. treasury yield curve stoked recession fears and rising uncertainty around the U.S.-China trade talks brought global slowdown concerns to the fore.
Benchmark 10-year U.S. Treasury yield fell to its lowest point since mid-September. The spread between the 10-year yield over its two-year counterpart also shrank to the smallest since the start of the financial crisis in January 2008, signalling to some investors an approaching U.S. economic slowdown.
Investors were also worried a trade deal between the world's two biggest economies was far from a sure bet, after Washington and Beijing agreed to temporarily end their trade war during talks at the G20 summit in Argentina.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.35%.
"Questions on trade, worries about U.S. growth and perceived dovishness on the Fed all play a part in explaining these market moves. Concerns were also compounded by increasing news narrative on inverted curves and risks of a recession," DBS Bank Ltd's rates strategist Eugene Leow and economist Radhika Rao said in a note.
Philippine stocks fell 2% before cutting some of the losses on data showing inflation eased in November.
"In terms of inflation, we saw it on a positive note. We're expecting somewhat for the index to at least recover," said Rachelle Cruz, a research analyst with Manila-based AP Securities.
Annual inflation slowed to a four-month low in November, easing pressure on the central bank to raise interest rates further with some analysts predicting a rate cut as early as next year, if the inflationary pressures continue to ease.
Persistent price pressures have curbed demand and had prompted the government to cut its economic growth target for this year in October.
Industrials and financials were the top losers, with SM Investments Corp dipping 2.3% and SM Prime Holdings Inc weakening 1.9%.
Singapore stocks extended losses into a second session, shedding as much as 1.3%.
Technology and utility stocks were the biggest losers with Jardine Strategic Holdings Ltd dropping 1.8% and DBS Group Holdings Ltd declining 1.7%.
Malaysian stocks fell 0.6%, dragged by telecommunication services and utility stocks, while Indonesian shares declined on financials and consumer discretionaries.
Malaysia posted its largest trade surplus in October, with total exports surging 17.7% from a year earlier, beating estimates of a 6.2% rise.
Financial and consumer staples stocks pulled down Vietnam shares, with Masan Group Corp and Vietnam Dairy Products JSC dropping 0.7% and 1.2% respectively.
The Thai stock market was closed for a holiday.
SOUTHEAST ASIAN STOCK MARKETS:
As at 4:04 GMT
|Market||Current||Previous close||Pct Move|
|Ho Chi Minh||955.24||958.84||-0.38|
Change on year
|Market||Current||End prev yr||Pct Move|
|Ho Chi Minh||955.24||984.24||-2.95|