Some Southeast Asian stock markets gained on Thursday as optimism about regional growth bolstered demand for consumer and bank stocks but a bearish outlook in the technology sector, after Dell's disappointing outlook, hurt related sectors.
Investors appeared to favour relatively less export-dependent markets with strong domestic consumption such as Indonesia, but concern about the US and European slowdown lingered, triggering late selling in some markets. Foreign inflows were light and domestic investors led the trend. Brokers in the region remain generally optimistic.
"I see the market is still bullish; with such good fundamentals we will keep on growing internally which will give a shield to external volatility," said Jakarta-based Harry Su, head of research of Bahana Securities, referring to Indonesia. "My year-end estimate for the Jakarta Composit Index is 4,350."
It climbed 1.7 percent to a two-week high of 4,020.99 on Thursday. Indonesia is Asia's best performer this year, ahead of third- and fourth-ranked Thailand and the Philippines. Philippine shares rose 1.5 percent, while Malaysia was flat and Thailand and Singapore gave up early gains to end a tad lower. In the city-state, non-oil domestic exports fell in July, raising the risk of recession.
Deutsche Bank said in a report the earnings momentum for Singapore companies had stagnated in the second quarter. It cuts its earnings estimates for shipbuilder COSCO Corp, as well as for Singapore Airlines due to rising fuel costs and a weak load factor. Southeast Asia generally fared better than the rest of Asia on Thursday. By 0947 GMT, the MSCI index of Southeast Asia had inched up 0.03 percent against a 1.83 percent drop in the MSCI index for Asia ex-Japan.
Asian stocks in general fell on profit-taking by nervous investors. Commodity and technology shares dragged the region's shares lower as investors skimmed off some of this week's gains because of worries about the US economy and eurozone debt. Southeast Asia saw some inflows this week after foreign selling earlier in the month when a crisis of confidence swept through global financial markets after Standard & Poor's cut the United States' triple-A credit rating, pushing investors into safe havens such as gold.
Malaysia, Indonesia, Thailand and the Philippines have pulled out of "oversold" zones, with the 14-day Relative Strength Index (RSI) of each pushing back into a neutral area of 38.4, 53.49, 49.98 and 51.73 respectively. Manila took in foreign inflows for a second day, adding $8.7 million to Wednesday's $25.8 million, but Thailand saw outflows of $22.4 million after $85 million in inflows on Wednesday, according to Thomson Reuters data and the exchange.
Indonesia, which resumed trading on Thursday after a holiday, gained a tiny $3 million in inflows, after $553 million in outflows in August to Tuesday, Thomson Reuters data showed. Indonesia's top firm by market value and main vehicle distributor, Astra International, jumped nearly 4 percent and Thailand's top lender, Bangkok Bank, rose 1.9 percent. Thai banks are seen as beneficiaries of the new government's pro-growth policies.