SE Asia stocks join global selloff, SET index drops 1%
published : 5 Aug 2019 at 18:54
writer: Reuters and Bangkok Post
Southeast Asian stock markets plunged on Monday, with the Stock Exchange of Thailand index shedding 1%, as an escalation of trade tensions between the United States and China sent investors worldwide scurrying for safe havens.
After US President Donald Trump abruptly decided on Thursday to slap 10% tariffs on $300 billion in Chinese imports, China vowed to fight what it called an "irrational, irresponsible act" and promised to "take whatever necessary countermeasures to protect" its "rights".
China let the yuan fall below the 7-per-dollar level for the first time in over a decade on Monday, raising fears of a possible currency war.
Beijing "appears to have decided that, given the increasingly dim prospects of a trade deal with the US, the boost to China's export sector from currency depreciation is worth attracting the ire of Trump", economic research consultancy Capital Economics said in a note.
China is Southeast Asia's biggest trading partner, and the protracted trade war between the world's two top economies has adversely affected markets in the region over the past year.
The SET index dropped 18.72 points or 1.11%, in turnover of 48.47 billion baht.
Philippine shares fell the most in almost nine months, dragged by financial and property stocks. Property developer SM Prime Holdings lost 4.3%, while lender Metropolitan Bank and Trust dropped 4%.
Indonesian shares closed at their lowest in more than two months, with financials accounting for most of the loss. Lenders Bank Rakyat Indonesia (Persero) and Bank Mandiri (Persero) fell 4% and 3.3%, respectively. Indonesia's economic growth in the second quarter roughly matched expectations, but was lower than the previous quarter and the weakest in two years. An index of Jakarta's 45 most liquid stocks dropped 3.2%.
Singapore shares fell the most in almost three months, with conglomerate Jardine Matheson Holding shedding 5.7%, while investment holding co DBS Group Holdings declined 3.7%.