Most Southeast Asian stock markets ended lower on Thursday, in line with broader Asia, as escalating trade tensions between the United States and China dampened risk appetite across the globe.
Asian shares ex-Japan dropped 1.6 % after the US on Wednesday stepped up pressure on China by proposing a higher 25% tariff on US$200 billion worth of Chinese imports.
US bond yields rose overnight, with the benchmark 10-year yields breaking above 3% to 2-1/2-month highs after the Treasury said it would boost borrowing in the bond market in the coming quarter.
"Higher yields on US bonds, Japanese bonds or even bills will be seen as negative for emerging markets, at least in the short term, with funds flowing towards alternative asset classes," said Charles William Ang, associate analyst at COL Financial Group Inc.
The Stock Exchange of Thailand index dropped 13.73 points or 0.80% to 1,708.28, in turnover worth 53.47 billion baht, with energy stocks leading the losses.
Shares of PTT Plc, down by nearly 1%, were the biggest drag on the index after oil prices inched lower on Thursday.
Singapore shares, down 1.3%, were the biggest losers in the region, dragged by financials.
Shares of DBS Group Holdings fell as much as 3% on Thursday after Southeast Asia's biggest lender reported a second-quarter profit below analysts' expectations.
Philippine shares fell 1%, led by industrials.
"Philippine markets have rallied over the last several weeks, mainly because of cheap valuations at the time, and that has led to profit-taking," Charles added.
SM Investments Corp and Ayala Land Inc weighed the most on the benchmark index.
Vietnam shares ended marginally higher with gains in utilities outweighing losses in consumer staples.