Southeast Asian stock markets plummeted on Thursday amid a global equities rout, a day after the Wall Street recorded its worst day in eight months on mounting concerns over a rapid rise in bond yields and the likelihood of faster interest rate hikes.
US inflation figures, due later on Thursday, will be closely watched by investors as a high outcome would only stoke speculation of more aggressive rate hikes from the Federal Reserve.
Singapore shares declined to a more than 20-month closing low and the Vietnamese index plunged nearly 5% as investors trimmed exposure to riskier assets amid a confluence of factors including a heated Sino-US trade battle and the International Monetary Fund's (IMF) warnings about global financial stability and growth risks.
IMF Managing Director Christine Lagarde on Thursday urged countries to "use all the tools" to resist the consequences of inevitable capital outflows.
Lagarde added that some emerging markets, including Southeast Asian countries, have been reluctant to ramp up such controls in the belief that they should only be used in exceptional circumstances.
MSCI's broadest index of Asia Pacific shares outside Japan hit a nineteen-month low during the day.
The Stock Exchange of Thailand index plunged 38.93 points or 2.26% to 1,682.89, in trade worth 82 billion baht. The Thai market slumped to a four-week closing low, weighed down by energy stocks. PTT Plc, down 5.56%, was the biggest drag on the index. The Energy Regulatory Commission has blocked the company's bid to acquire Glow Energy Plc.
Singapore shares, down 2.7%, extended losses into a sixth session, with heavyweights Jardine Strategic Holdings and Jardine Matheson Holdings falling 4.4% and 3.7%, respectively.
The Vietnamese index dropped 4.8% to a more than two-month closing low and was the worst performer in the region. Petrovietnam Gas fell 6.9% while Vingroup JSC lost 3.7%.
"Domestically, Vietnam is facing an upward pressure on inflation, mostly due to a rise in energy prices. We don't know yet where the (market) bottom is," said Tran Anh Tuan, chief analyst at Vietcombank Securities.
The Manila index declined 1.7% to a 21-month closing low, weighed down by industrials and financials sectors. SM Investments slid 3.2% while Ayala Corp fell 2%.
Malaysian shares hit a three-month closing low, extending losses into a seventh session, while the Indonesian index fell 2% to a five-week closing low.