Major Southeast Asian stock markets fell to multi-week lows on Monday as worries that Greece's debt problems could hurt the global economic recovery took a toll on global risk assets and weak commodity markets fuelled a sell-off in resource shares. Stock markets in the region reported foreign outflows on the day as money shifted to safe assets.
Leading the region's losses, Indonesia's main stock index dropped 2.4 percent. Southeast Asia's worst performer on the day fell to the lowest in nearly four weeks at one point, with commodities firms among badly hit counters. Stocks in Singapore and Thailand fell almost 2 percent, with Malaysia and the Philippines posting smaller losses. All hovered around two-week lows.
In Bangkok, better-than-expected first-quarter GDP data and a resilient outlook for the Thai economy failed to lift sentiment amid the renewed worries about debt problems in the eurozone. "The first-quarter GDP was not a big surprise. So the Thai market followed the negative global leads," said Wikij Tirawannarat, senior analyst at broker Capital Nomura Securities.
Southeast Asia's second-largest economy grew 2.0 percent in the first quarter from the previous three months due to strong exports and a steady rise in consumer spending, reinforcing expectations of a June interest rate rise to curb inflation. The Thai market reported $90 million in foreign outflows on the day, while Indonesia, the Philippines and Malaysia saw smaller outflows, according to Thomson Reuters data and the stock exchanges.
The MSCI index for Southeast Asia tumbled 2.7 percent and MSCI's index of Asia Pacific shares outside Japan had fallen 2.67 percent by 0942 GMT. Following a Fitch Ratings cut in Greece's debt ratings by three notches on Friday, pushing the country's debt deeper into junk status, rival Standard & Poor's cut its outlook for Italy to "negative" from "stable" on Saturday.
Energy and palm oil stocks were among big index losers in the region. Top Thai energy firm PTT eased 3.1 percent and Singapore-listed palm oil firm Noble Group dropped 2.4 percent. Indonesian coal miner Adaro Energy fell 2.1 percent, Energy Development Corp, the Philippines' largest producer of geothermal power, eased 1.1 percent and Malaysian palm oil firm IOI Corp dropped 1.5 percent.
In Hanoi, big-caps led the market drop. Vietnam's main share index plunged 3.5 percent to the lowest in nearly two years due to pressure from margin calls. Among regional bright spots, Singapore-listed tin producer Malaysia Smelting Corporation rose as much as 4.3 percent after outlining acquisition and expansion plans.
The company told Reuters on Friday it was looking to acquire concessions for three or four tin mines in Malaysia and Indonesia to tap into strong demand from China's booming electronics industry. It said over the weekend it had signed an agreement with the government of the Democratic Republic of Congo on the possible development of tin mines in the African country.