Philippine shares hit an all-time high on Thursday on expectations the central bank would cut interest rates to boost the economy, but most other Southeast Asian stock markets succumbed to profit taking as investors locked in some of this year's strong gains.
The Philippine main index ended the day up 0.8 percent, after surging more than 2 percent at one point to an intraday record high of 5,011.09 points. As expected, the central bank cut its main policy rate by 25 basis points after the market close to a record low of 4 percent to help cushion the domestic economy from the global slowdown.
Bank shares saw strong gains on hopes lower rates would boost demand for loans and spur earnings growth. Top lender Bank of the Philippine Islands ended nearly 5 percent higher and second-ranked Metropolitan Bank & Trust Co rose 3.7 percent. "The market anticipated another rate cut and we've seen a lot of buying into banks," said Ira Ganhin, an analyst with Manila-based BPI Asset Management.
"The level of bad loans has fallen while loan growth is also increasing. So, everything seems to be going right for the banking sector," he said. Shares in much of the rest of Asia retreated on concerns about the global economic outlook.
Federal Reserve Chairman Ben Bernanke on Wednesday put the brakes on the recent global rally by curbing optimism about the strength of the US economic recovery, but without signalling any further monetary easing to stimulate growth. Chinese official and private-sector factory data also reminded investors of the fragile state of the global economy, while suggesting Beijing could avoid a hard landing.
Stocks in Singapore erased early gains to end 0.5 percent lower, while Indonesia's main index fell 0.58 percent after gaining 2.1 percent the previous session. Malaysia also pulled back from the day's high to end up 0.2 percent and Thailand's SET index was up 0.4 percent. Vietnam's Ho Chi Minh Stock Exchange index rose 1 percent.
The MSCI's broadest index of Asia Pacific shares outside Japan fell 1 percent by 1000 GMT while the MSCI index for Southeast Asia, made up of selected regional stocks, was down 0.6 percent. The Southeast Asia index had surged more than 13 percent so far in 2012 through Wednesday's close as hopes for some stabilisation in Europe's debt crisis and encouraging US economic data emboldened investors to move back into riskier assets.
Among more actively-traded stocks, Singapore Telecommunications Ltd lost 1.3 percent after Wednesday's 1.3 percent rise. One trader attributed the fall to profit-taking. In Bangkok, shares in Thailand's largest convenience store chain, CP All Pcl, fell 1.1 percent. It rose to record high on Wednesday thanks to its expansions and the strong outlook for domestic consumption.
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