Southeast Asian stocks fell on Thursday, in line with Asian markets, as the likelihood of a US rate increase in June lifted the dollar to a near two-month high and left bonds, stocks, commodities and emerging markets all nursing losses.
Minutes from the Federal Reserve's last meeting took the market off guard after they revealed most policymakers thought a June rise would be appropriate if the US economy continued its recent improvement.
MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 1% to its lowest since March 9.
"In general, a rate hike in June could be seen as a positive, as it suggests that the US economy is doing a lot better," said Carey Wong of Singapore-based OCBC Investment Research.
"But market remains divided if other central banks will follow in the Fed's footstep, and that could create some uncertainty and increased volatility."
Philippines fell nearly 1.5%, its first loss in five sessions, shrugging off strong quarterly GDP growth data released earlier in the day.
Financial stocks took a hit, with heavyweights Bank of the Philippine Islands and Metropolitan Bank and Trust Co closing 1.1% and 3.2% lower, respectively.
Singapore's Straits Times index fell 1.3%.
Financial stocks, the biggest constituent of the index, fell 1%, dragged down by United Overseas Bank Ltd and DBS Group Holdings Ltd.
Indonesia hit a near three-month closing low, led down by telecom and utilities, while Malaysia ended 0.1% lower.