Most SE Asia stocks fall as risk sentiment sours

Most Southeast Asian stock markets declined on Wednesday as overnight losses on Wall Street coupled with monetary policy concerns in China hurt investor sentiment.

A senior researcher at the People's Bank of China has urged central banks to adopt monetary policies that do not encourage markets to expect lower interest rates indefinitely that encourage excessive risk-taking by lenders, the Securities Times reported.

"China has been clamping down on risky practices such as in the cash loans sector," said Liu Jinshu, director of research at NRA Capital in Singapore.

MSCI's broadest index of Asia-Pacific shares outside Japan hit a near two-month low and was last down 1.5%.

Japan's Nikkei posted its worst fall in eight-and-a-half months, shares in Seoul dropped 1.5%, and the Shanghai Composite index declined 0.29%.

US technology stocks stuttered yet again on Tuesday after a brief pickup, with investors shifting money to banks, retailers and other stocks seen as likely to benefit the most from tax cuts promised by US President Donald Trump.

Singapore shares fell 1.2% on Wednesday to their lowest close in two weeks, with top lenders DBS Group Holdings, United Overseas Bank and Oversea-Chinese Banking Corp declining in a range of 2% to 3%.

"A look at the gains and losses within the STI constituents suggests a flight to safety with telcos and REITs performing better than banks, developers and offshore and marine names," said Liu.

Philippine shares erased early gains to close marginally lower, dragged by real estate and industrial stocks.

Malaysian shares closed 0.4% lower, shrugging off better-than-expected export growth.

Financials were the top losers with Hong Leong Bank shedding 4.8%, while Malayan Banking fell 1.3%.

Meanwhile, Indonesian shares rose 0.6%, aided by gains in financial and consumer discretionary stocks.