Malaysia stocks slump over 2%, SET drops again

Most Southeast Asian stock markets fell on Wednesday, with Malaysia declining the most since January 2016 and the Stock Exchange of Thailand dropping.

Risk appetite took a hit after US President Donald Trump tempered optimism over trade talks between the world's top two economies.

MSCI's Asian stocks outside Japan were down 0.8% after the US president said he was not pleased with recent trade talks with Beijing.

"The on-and-off status of US-China trade talks is affecting sentiment. At some point, traders may just decide to stay on the sidelines," said Liu Jinshu, director of research, NRA Capital.

Malaysian shares plunged 2.21% to their lowest close since early January over worries about the size of debt its previous government had left behind.

Finance Minister Lim Guan Eng said on Tuesday that the previous government deceived the public and parliament over the country's financial situation and state fund 1Malaysia Development Bhd.

This came amid worries that the new government's populist promises could undermine the country's economic prospects at an increasingly challenging time.

Foreign stock inflows for 2018 have been wiped out, with the market posting net outflows of US$21.2 million as of May 21, according to data from OCBC Bank.

Telecom company Axiata Group slumped 12.6% on weak quarterly earnings, while CIMB Group Holdings fell 6.5%.

The SET main index slid 7.11 points or 0.40% to 1,753.60, in trade worth 64 billion baht. PTT Plc dropped 3.17% to 53.50 baht and PTT Exploration and Production Plc ended 3.34% lower to 144.50.

Singapore shares fell 1.3% to their lowest close in more than five weeks.

Index heavyweight Oversea-Chinese Banking Corp declined 1.8%, while DBS Group dropped 1.5%.

Banking stocks traded lower as they are likely to have some exposure to Hyflux Ltd's debt, said Liu Jinshu.

Water treatment company Hyflux said on Tuesday it filed for reorganisation of its business after lower electricity prices hurt its finances.

The city-state's headline consumer price index rose lower than expected in April from a year earlier.

Philippine shares erased early gains to end 1.1% lower, extending falls into a sixth session. Property operator SM Investments Corp closed 3.5% lower.

Meanwhile, Indonesian shares rose 0.7% to their highest close in a week. Financials and consumer stocks were among the top gainers, with Astra International and Bank Mandiri rising 4% each.

Vietnam shares fell 2% in intraday trading before recovering to close 0.3% higher.