Southeast Asian stock markets inched up on Friday, in line with Asian peers, after the Bank of England cut interest rates on Thursday, and announced billions of pounds of stimulus to soften the economic shock from the Brexit vote. Acting on its chief economist's wish to use "a sledgehammer to crack a nut", the BoE reduced interest rates by 25 basis points to a record-low 0.25 percent.
BoE's first cut since 2009 was accompanied by a pledge to buy 60 billion pounds ($79 billion) of government bonds with newly created money over the next six months, and two new stimulus schemes. "I do not think we will hit any new highs. Rallies (in Southeast Asian markets) are not big. Most of the rate cut was really priced in. I think if they did not cut the rates, it would be down much, much more," said Joseph Roxas, an analyst with Manila-based Eagle Equities.
An overnight rally in crude oil prices also sharpened risk appetite, while sterling nursed deep losses after sliding on news of the BoE stimulus plan. The Jakarta Composite Index rose 0.86 percent to its highest since April 24, 2015, as data showed Indonesia's annual economic growth accelerated more than expected to 5.18 percent in the second quarter.
In April-June, Indonesia went on to post its strongest growth in 10 quarters, prompting some economists to predict that the country will outperform most Southeast Asian nations this year. Thai shares closed up to mark their third straight session of gains, aided by financial and telecom stocks. Advanced Info Service, Thailand's largest mobile phone operator, on Thursday forecast 2016 revenue would be slightly better than in 2015, saying service revenue growth in the second half was expected to improve from the first half.
Malaysia extended gains to close higher, driven by gains in financial and consumer stocks. Malaysia's exports rose unexpectedly in June, driven by higher demand for manufactured goods from the United States, which offset the hit to the oil-producing country's commodities shipments. Vietnam closed lower, dragged down by financial stocks, which accounted for more than three-fourths of the losses on the index. Vingroup, Vietnam's top property firm, dipped 5.9 percent. Earlier in the session, it hit its lowest since April 11.
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