Southeast Asian stock markets rose on Friday after US treasury yields receded from recent highs, while the Korean leaders' pledge to pursue a peace deal eased geopolitical tensions, boosting investor confidence. The two Koreas announced they would work with the United States and China this year to declare an official end to the 1950s Korean war and seek an agreement to establish "permanent" and "solid" peace in its place.
"The markets are continuing to buy into this drop in the geopolitical risk in the region, which in my view from an equity perspective, is massively amazing," said Stephen Innes, head of trading for Asia Pacific, Oanda. The Indonesia index snapped five straight sessions of declines to close 0.2 percent higher but posted its biggest weekly loss in nearly five years.
Indonesian central bank governor said on Thursday he would be prepared to adjust the benchmark interest rate if weakness in the rupiah currency threatened Indonesia's inflation target or the stability of the financial system. The country's index of 45 most liquid stocks was up 0.25 percent, but ended the week with an 8.6 percent loss.
Malaysian shares closed 0.6 percent higher but the index fell 1.3 percent in the week. Singapore stocks were subdued but ended the session on a positive note. Philippine stocks ended 1.4 percent higher led by gains in industrial and financial stocks. The index was little changed over the week. Index heavyweights SM Investments Corp rose 2.7 percent while Ayala Corp gained 3.2 percent.
Vietnam shares closed 0.5 percent higher. The index, with a market capitalisation of $140 billion, fell over 6 percent this week. Analysts attributed this to profit-taking and that the correction will be short-lived. Thai stocks rose 0.3 percent but lost 1.3 percent for the week.
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