Philippines, Indonesia down over 1%; Fed decision awaited

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BENGALURU (July 31): Philippine and Indonesian shares fell more than 1% on Tuesday while most other markets in the region inched higher after the Bank of Japan maintained its accommodative monetary stance, but gains were limited on caution ahead of the US Federal Reserve's policy meeting.

Bank of Japan on Tuesday said it would keep interest rates "very low" for the time being and took measures to make its massive stimulus programme more flexible.

Globally, investors are keeping a close eye on the outcome of US Federal Reserve policy meeting on Wednesday, where it is expected to keep key rates unchanged.

"The key driver right now is policy normalization in the United States with the Fed tightening key rates, while ECB and Bank of Japan are still easing their monetary policies which is supportive for global equity markets," said Joel Ng, an analyst at KGI Securities.

Indonesian shares slumped 1.5%, ending a seven-session winning streak, after the country's largest telecom player Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk reported a fall in half-year net income.

Meanwhile, data showed the country's exports and output of palm oil fell in June from a month earlier.

Philippine shares ended a five-day gaining streak and closed 1.3% lower, dragged by financials. The index, however, posted its sharpest monthly rise since March 2016.     

Malaysian shares extended gains to a seventh straight session and ended 0.8% higher as investors brushed aside lower palm oil product exports data for July. The index recorded its biggest monthly gain since October 2011.

Exports of Malaysian palm oil products for July fell 3.9% to 1 million tonnes shipped compared with 1.1 million tonnes shipped during June.

Singapore rose 0.4%, led by financial and industrial stocks.

"Singapore's bank loans growth unexpectedly accelerated from 5.5% y-o-y in May to 5.9% y-o-y in June. This beat our expectations for a moderation in June, and marked the fastest pace of bank loans growth since November 2017," OCBC Treasury Research said in a note.

Financial bellwethers Oversea-Chinese Banking Corp, United Overseas Bank and DBS Group Holdings, all gained ahead of earnings.

SOUTHEAST ASIAN STOCK MARKETS
Change on the day

Market          Current      Previous close    % move
Singapore       3319.85      3307.15     0.38
Bangkok         1701.79      1701.87     0.00
Manila          7672         7773.32     -1.30
Jakarta         5936.443     6027.936    -1.52
Kuala Lumpur    1784.25      1770.26     0.79
Ho Chi Minh      956.39       949.73      0.70

Change on year

Market          Current      End 2017    % move
Singapore       3319.85      3402.92     -2.44
Bangkok         1701.79      1753.71     -2.96
Manila          7672         8558.42    -10.36
Jakarta         5936.443     6355.654    -6.60
Kuala Lumpur    1784.25      1796.81     -0.70
Ho Chi Minh     956.39       984.24      -2.83