Major Southeast Asian stock markets pushed higher on Monday as investors snapped up financial and resource stocks in reporting season and markets cheered reports that the United States had reached a last-minute deal to escape default.
Worries about the US debt crisis appeared to ease, sending share markets to fresh peaks, including new all-time highs for stocks in Indonesia and the Philippines. Shares on both bourses gained around one percent on the day. Others posted smaller gains, with Thai stocks scaling 15-year highs and Singapore rising to its highest in almost six months. Bucking the trend, Vietnam dropped 0.9 percent to the lowest since May 26, with tiny net foreign outflows of $60,000, after taking in only $59,000 in past four sessions.
The overbought region is bound to see some profit taking, in part as investors remain cautious about the US, traders said. "Market would be worried with the outlook of US economy which open chances for US credit rating downgrade in the next three to six months," said Viwat Techapoonphol, strategist at broker Tisco Securities in Bangkok.
Stocks in Asia rose while gold and the yen dropped on Monday as investors cut safety trades when Washington reached a last-minute deal to escape default, though the top US credit rating could still be downgraded. Indonesia reported $29.4 million inflows on Monday after $608 million in July and the Philippines gained $9.2 million in inflows after taking in $156 million last month, according to Thomson Reuters data.
Indonesia and the Philippines were among overbought markets, with their 14-day Relative Strength Index (RSI) hovering around 70, an overbought indication. The 14-day RSI of Singapore and Thailand were also around 70 at the close on Monday. Resource shares were among actively-traded stocks amid strong global oil prices and as buying interest rose in a reporting season.
Among actively traded stocks, Thailand's top oil refiner Thai Oil climbed 2.4 percent, Singapore's Sembcorp Industries gained 1.2 percent and Indonesia's PT Energy Mega Persada surged 3.9 percent. In Singapore, property developer City Developments rose 2.8 percent, buoyed by hopes that interest rates would stay put in the near term after Washington's deal to cut its deficit, traders said. Among bright spots, Bank of the Philippine Islands rose 2.2 percent after it reported a 18 percent rise in second-quarter net profit.