Most Southeast Asian stocks closed lower on Thursday as investor risk appetite remained subdued ahead of a crucial policy meeting by the European Central Bank and the release of US jobless claims data later in the day. "The outcome of the ECB meeting, along with data from the US, will set the tone for economic growth," said Alex Tiu, an analyst with AB Capital Securities Inc in Manila.
ECB policymakers meeting in Frankfurt must consider a list of concerns including the impact of Britain's vote to leave the European Union, a potential Italian banking crisis and suggestions the ECB is running out of policy ammunition. While the ECB is seen standing pat on policy, the market expects the central bank to hint at future monetary policy easing, forecast to come as early as September.
Indonesian shares closed 0.5 percent lower, surrendering initial gains, after its central bank held current and future benchmark rates unchanged on Thursday, against market expectations for another cut. "Markets were expecting a rate cut today, and are reacting out of disappointment. There was also some profit-taking and residual reaction to the tax amnesty bill," said Elvira Tjandrawinata, analyst with Nomura Indonesia. "A mix of these factors drove the markets down today." Indonesia's new tax amnesty programme aims to bring home billions of dollars citizens have parked overseas.
Malaysia finished 0.7 percent lower, the biggest percentage loser in the region, with consumer cyclicals dragging down the index. Genting Bhd and IHH Healthcare Bhd were down 3.9 percent and 1.8 percent, respectively. Philippine shares however recovered from initial losses to end up 0.6 percent, its highest close in 15 months. Singapore closed marginally lower, with Keppel Corp among the biggest percentage losers after it reported a 48 percent fall in quarterly net profit. Thai stocks closed down 0.4 percent, while Vietnam ended slightly lower.
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