Philippine shares trimmed early sharp falls to close about half a percent lower on Thursday, while Thai stocks advanced for a third straight session. The key Philippine stock index fell as much as 1.3 percent after data showed economic growth unexpectedly weakened to a near three-year low in the second quarter.
After market hours, the central bank raised key interest rates by 50 basis points, the biggest hike in 10 years, and left the door open for further policy tightening to fight high inflation despite economic growth losing steam. GDP slowdown increases the challenge for a government that is funding a multi-billion infrastructure overhaul and a central bank grappling with rising inflation.
An increase in rates will likely further slowdown growth in the economy, said Paolo Ayson, an analyst at Manila-based RCBC Securities. SM Prime Holdings fell 1.3 percent, while Jollibee Foods Corp declined 2.8 percent. Indonesian shares declined 0.5 percent with consumer and telecom stocks leading the fall. Telekom Indonesia closed 1.7 percent lower, while Bank Negara Indonesia fell nearly 2 percent.
Vietnam shares slipped with real estate company Vingroup declining to a two-week low and Vietcombank down 1.3 percent. Thai shares closed marginally higher. Banks led gains with Siam Commercial Bank and Bank of Ayudhya closing 3.2 percent and 1.8 percent higher respectively. The Singapore stock market was closed for a holiday.
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