Southeast Asian stock markets were mostly flat to lower on Monday as concern over a potential US debt default hurt sentiment, but investors bought banks, seen as the best bet in a region where interest rates are on the rise. Regional equities were subdued as debt talks continued in Washington, keeping investors nervous ahead of a deadline of August 2. Stocks in Indonesia, which struck record highs last week due to foreign inflows, edged down 0.5 percent.
Singapore and Malaysia also edged slightly lower, while Thailand, the Philippines and Vietnam recouped early losses to end in positive territory. Trading volume was generally moderate to weak, the most active market being Indonesia with 1.6 times its 30-day average, but turnover in Singapore and Malaysia fell to around 0.8 times their 30-day average.
Brokers say economic growth in Asia has been relatively resilient to US and European troubles, making Asia's outlook promising, but markets in the region may be choppy in the short term due to the negative impact of the US debt crisis. By 0954 GMT, the MSCI index of Southeast Asia had eased 0.25 percent while the MSCI index of Asia excluding Japan was down 1.1 percent.
Indonesia reported a modest $12 million in foreign outflows on Monday after $68 million in inflows last week, according to Thomson Reuters data. The Thai stock market gained another 1.8 billion baht ($60 million) in inflows after racking up $530 million last week, when the index hit a 15-year high, the exchange said. Among the most active issues, Thailand's Siam Commercial Bank surged 3.7 percent, Singapore's United Overseas Bank gained 0.5 percent and Metropolitan Bank & Trust, the Philippines' second-biggest lender by assets, rose 0.6 percent.
Bank Negara Indonesia, Indonesia's fourth-biggest lender by assets, climbed 1.3 percent after its first-half net profit rose 41 percent as loan growth picked up. Investors in Singapore sold property shares as analysts saw increased policy risk following data that showed the Housing and Development Board's resale prices for apartments rose 3.1 percent in the second quarter from the first, while private home prices were up 2 percent.