Indonesian shares rose on Monday, bouncing back from their biggest single-day fall in a year in the previous session, while Philippine stocks extended declines into a fifth session. The Jakarta SE Composite Index closed 0.8 percent higher, driven by robust gains in financial and consumer discretionary stocks, after Thursday's 1.8 percent drop. The Indonesian market was closed on Friday for a public holiday.
"On Thursday, foreigners net sold about 2 trillion rupiah, regardless of the MSCI rebalance," said Taye Shim, head of research at Mirae Asset Sekuritas, Indonesia. "I think the fundamentals of Indonesia still remain intact and we are still very optimistic."
An index of the country's 45 most liquid stocks closed 1.6 percent higher. Indonesia's annual inflation rate fell for a fifth consecutive month in November, reaching its lowest since December 2016, data from the country's statistics bureau showed.
Meanwhile, manufacturing conditions improved slightly in November, data from the Nikkei Indonesia Manufacturing Purchasing Managers' Index showed. Heavyweights Bank Central Asia Tbk PT and Astra International Tbk PT were the biggest drivers, closing 2.2 percent and 1.6 percent, respectively. Philippine stocks dropped 0.7 percent on fears of foreign fund outflows after the passage of a Senate tax bill in the United States over the weekend raises the risk of more aggressive rate hikes
in the world's largest economy. The Senate narrowly approved the bill on Saturday, moving the country a step closer to a major tax overhaul that would slash corporate taxes and possibly boost corporate profits and lead to a slew of share buybacks.
"I think because of the recent optimism of the tax reform, you see a temporary allocation of funds which used to be in the Philippine market and other emerging markets going back to the US," said Fio Dejesus, an analyst with RCBC Securities in Manila. Foreign investors net sold equities worth 474.2 million pesos ($9.38 million) on Monday. Financial and industrial stocks were the biggest losers. Ayala Corp dropped 2.1 percent, while International Container Terminal Services Inc declined 3.3 percent. Malaysian stocks fell 0.3 percent even though data showed manufacturing in November expanded at its fastest pace in three-and-a-half years. The Malaysian market was closed on Friday for a public holiday. Singapore dropped 0.3 percent ahead of November manufacturing data.
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