Most Southeast Asian stock markets jumped on Thursday after the US Federal Reserve's caution on inflation tempered expectations for interest rate tightening in 2018, while Singapore shares dropped after four straight sessions of gains.
Though the Fed delivered a quarter percentage point rate hike as widely expected, it left its rate outlook for the coming years unchanged and projected inflation to remain shy of its goal for another year.
Higher Fed rates can make US securities look more attractive compared with risky assets such as Asian equities, leading to outflows of funds from emerging markets, including the Southeast Asian region.
Indonesian shares rose 1% to a record close, boosted by conglomerate Astra International Tbk PT and cement manufacturer Indocement Tunggal Prakarsa Tbk PT.
An index of the country's 45 most liquid stocks also scaled an all-time high.
Malaysian shares jumped 1.2% to a two-month closing high, with banking stocks accounting for most of the gains.
The World Bank raised its 2017 growth estimate for Malaysia's economy to 5.8%, which would be the biggest annual expansion since 2014, buoyed by rising domestic demand and an improved labour market. The lender had projected a growth of 5.2% in October.
Public Bank Bhd climbed 2.2% to a three-and-a-half-year closing high, while Malayan Banking Bhd and CIMB Group Bhd gained 2.6% and 3.1%, respectively.
Philippine shares climbed 1.2% to close at a five-week high after the Congress late on Wednesday approved a much awaited tax-reform bill that President Rodrigo Duterteneeds to push ahead with his economic agenda.
The reforms will lower personal income taxes, expand the value-added tax base, raise taxes on petroleum products, automobiles, and slap taxes on some sugar-sweetened beverages, among others.
Heavyweights SM Prime Holdings and SM Investments Corp were the top market movers, rising 3.6% and 2.3%, respectively.
Conglomerate GT Capital Holdings Inc was the biggest gainer on the index, climbing 5% to its highest close since May 9.
After market hours, the central bank kept its key interest rate steady, dismissing concerns that the economy is at risk of overheating from strong domestic demand and investments.
Vietnam shares closed 1.2% higher, supported by financials and consumer staples.
Meanwhile, Singapore shares declined 1% on profit-taking with financials accounting for most of the falls.
Top lenders Oversea-Chinese Banking Corp, DBS Group and United Overseas Bank Ltd dropped 1.3% to 2.2%.
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Southeast Asian stock markets |
|
||
|
|
Current |
Previous |
% change |
|
Indonesia |
6,113.65 |
6,054.60 |
+0.98 |
|
Malaysia |
1,759.00 |
1,737.66 |
+1.23 |
|
Philippines |
8,461.06 |
8,359.61 |
+1.21 |
|
Singapore |
3,435.78 |
3,468.77 |
-0.95 |
|
Vietnam |
935.85 |
924.40 |
+1.24 |