SE Asian stocks fall as Sino-US relation strains ahead of trade talks

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(Jan 29): Southeast Asian stock markets fell on Tuesday after the United States charged China's Huawei with bank fraud and for conspiring to steal trade secrets, denting hopes of a trade deal days before talks between Washington and Beijing.

Broader Asian shares felt the heat of recent developments as the MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.5%.

Investors nervously await resolution to US-China trade spat as Chinese Vice Premier Liu He visits Washington on Jan 30-31 for a fresh round of talks.

Prospects for a Sino-US trade deal dimmed as the US Justice Department charged the world's biggest telecommunications equipment maker Huawei Technologies Co Ltd and its chief financial officer Meng Wanzhou with conspiring to violate US sanctions on Iran by doing business with Tehran through a subsidiary it tried to hide.

However, US Commerce Secretary Wilbur Ross said the Huawei charges are "wholly separate" from the trade negotiations.

"Having relented on the US government shutdown, President Donald Trump needs to show a win on trade at his State of the Union address on 5 February," said DBS Group Research in a client note.     

"But this morning's indictments by the US Department of Justice against China's Huawei, its chief financial officer, and two bank affiliates illustrate the risks attached to the US-China relationship," DBS added.

Singapore and Vietnam, both technology exporters, were also under pressure after warnings from US manufacturers Caterpillar Inc and Nvidia Corp about softening Chinese demand.

Singapore shares fell as much as 0.7%, with a bulk of losses coming from the technology sector, after Nvidia Corp on Monday cut its fourth-quarter revenue estimate on weak demand for its gaming chips in China and lower-than-expected data centre sales.

Venture Corp slipped as much as 1.3%, while Singapore Technologies Engineering lost as much as 1%.

Vietnam shares were on track to snap four straight days of gains, losing as much as 0.5%.

Petrovietnam Gas Joint Stock Corp and Saigon Beer Alcohol Beverage were the biggest drags, falling as much as 1.5% and 0.8%, respectively.

Thai shares slipped as much as 0.3% on broad-based losses.

Data on Tuesday showed the country's manufacturing production index (MPI) in December rose 0.75% from a year earlier, but missed analyst expectations.


Market                 Current   Previous close  % move
Singapore              3181.09   3199.5          -0.58
Bangkok                1623.52   1625.03         -0.09
Manila                 8026.14   8053.92         -0.34
Jakarta                6453.835  6458.712        -0.08
Kuala Lumpur           1689.71   1697.5          -0.46
Ho Chi Minh            907.83    912.18          -0.48

Change so far in 2019

Market                 Current   End 2018        % move
Singapore              3181.09   3068.76         3.66
Bangkok                1623.52   1563.88         3.81
Manila                 8026.14   7,466.02        7.50
Jakarta                6453.835  6,194.50        4.19
Kuala Lumpur           1689.71   1690.58         -0.05
Ho Chi Minh            907.83    892.54          1.71