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Asia: Most stock markets decline; Indonesia plunges to near 4-week low
[BENGALURU] Most Southeast Asian stock markets slumped on Thursday as positive economic data drove US Treasury yields up and raised the chances of a December rate hike, sending jitters through the region.
Shares in Indonesia and Singapore plunged to their lowest in nearly four weeks and one week, respectively.
A survey on the US services sector showed activity raced to a 21-year high in September, driving the US Treasury yields to their highest since mid-2011, sparking speculation that payrolls data on Friday could also surprise.
The upbeat report will likely keep the US Federal Reserve on track to raise interest rates again in December, after hiking rates last week for the third time this year. However, higher US yields are not favourable for emerging markets as they tend to draw away much-needed foreign funds while pressuring local currencies.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 1.5 per cent.
Philippine shares fell 0.8 per cent, reversing gains from the previous session, to an over one-week low.
Real estate stocks hurt the index the most, as Ayala Land and SM Prime Holdings lost 2.6 per cent and 0.6 per cent, respectively. The country's annual inflation data, which is due on Friday, likely continued to rise in September, keeping pressure on the central bank to raise interest rates further.
"Rising yields abroad are going to impact our exchange rate because of the interest parity factor. It furthers the inflationary pressure on the Philippines because imports as a substitute for local supplies would be more expensive for us," said Jose Vistan, research head at AB Capital Securities in Manila.
Indonesia's benchmark index fell as much as 1.6 per cent, extending loses into a fourth straight session, with financials and consumer stocks hurting the most.
Bank Central Asia lost 1.5 per cent and Unilever Indonesia slid 2.2 per cent. The index of the country's 45 most liquid stocks was down 1.9 per cent.
Singapore's index lost as much as 1.2 per cent, weighed down by financial and industrials sectors. Oversea-Chinese Banking Corporation slipped 1.2 per cent and conglomerate Jardine Matheson Holdings fell 2 per cent. Thai shares fell for the third straight session, while the Malaysian index fell 0.2 per cent. Vietnam index edged up 0.2 per cent.