Most Southeast Asian stock markets closed weaker on Thursday after Washington's ban on China's Huawei Technologies stoked worries of a protracted Sino-US trade dispute, with the Indonesian index hitting a six-month closing low. The US Commerce Department moved to add Huawei and 70 affiliates to its so-called "Entity List", effectively banning the Chinese telecoms giant from buying parts and components from US companies without a government approval.
"The markets continue to be headline-driven," said Liu Jinshu, director of research, NRA Capital, referring to the US business restrictions on Huawei, the world's second-largest smartphone maker. The ban on Huawei "can be taken negatively with regards to how the Trump administration plans to ease tensions between the two largest economies in the world," said Fio Dejesus, equity research analyst, RCBC Securities.
Leading the losses, the Indonesian index dropped 1.4% to close at its weakest since Nov. 15, 2018, dragged lower by industrials and utilities. Southeast Asia's largest economy kept its benchmark interest rate unchanged at 6%, as expected, following a central bank meeting on Thursday.
Last year between May and November, the Bank Indonesia raised the benchmark six times by 175 basis points to support the rupiah in the wake of US rate hikes by the Federal Reserve. Philippine stocks dropped 1.3% to mark their lowest since January 2, as the benchmark index was dented by energy and industrial stocks.
The Philippines, an ally of the United States, in February pushed ahead to launch a Huawei Technologies-backed 5G service in the country, while Washington said it would rethink cooperation with allies who use Huawei. Malaysia stocks ended nearly 1% lower, pulled down by healthcare sector with medical grade gloves maker Hartalega Holdings falling 2.7%.
Data on Thursday showed Malaysia's economy in the first three months of the year grew at a slower pace than the prior quarter, despite beating expectations forecast in a Reuters poll. Bucking the downtrend, the Singapore index and the Vietnam benchmark ended marginally higher, with the city-state being boosted by technology shares, while the latter was lifted by consumer stocks. South Korea's chip-to-energy conglomerate SK Group said on Thursday it has agreed to buy a 6.1% stake in Vietnam's Vingroup JSC for $1 billion.
Comments
Comments are closed.