Some Southeast Asian stock markets edged up on Friday, helped by selective buying in medium-caps that have favourable earnings, but sentiment in the region broadly remained dominated by fears related to the eurozone's debt problems.
Markets in the region had another relatively subdued session but some investors bought back shares to cover short positions taken during the more bearish news flows out of Europe. The region was mixed on the week, with Singapore posting losses for a second week after disappointing corporate results but Thailand ending with a small gain, recouping part of last week's losses amid bargain-hunting. "We have been cautious on the markets, sticking to core sector picks of telecoms, REITs and consumer staples," said CIMB Research regional strategist Chang Chiou Yi.
"In October, we started adding incremental risks with emerging value. Now, following the rebound and re-emergence of European worries, I would think markets will be choppy for some time." Singapore's Straits Times Index edged up 0.14 percent on the day, the Thai index was up 0.3 percent and Philippine shares ended up 0.7 percent. Indonesia and Malaysia posted limited losses. Vietnam's Ho Chi Minh Stock Exchange index fell for a fifth session, down 1.18 percent. Vietnam led losers on the week, down 3.5 percent, followed by Singapore's 2.1 percent loss.
In Bangkok, a comment by the Bank of Thailand hinting at a possible rate cut this month led some investors to shift back into equities. The governor told Reuters he saw room to be flexible with interest rates, as businesses suffered during the worst floods in half a century.
Brokers in Jakarta said the Indonesian central bank's larger-than-expected rate cut of 50 basis points on Thursday was generally positive for the stock market but sentiment was dominated by global factors. "Investors' responses to the rate cut were limited and trading remains flat. Attention is still on developments in Europe," said Yasmin Soulisa, an analyst at Bapindo Bumi Sekuritas in Jakarta.
Among gainers on Friday, Ayala Corp edged up 0.35 percent after the Philippines' oldest conglomerate posted higher income for the first nine months. Singapore-listed commodities firm Noble Group gained as much as 4.2 percent after losting more than a quarter of its value the day before as the departure of its chief executive and first quarterly loss in more than a decade spooked investors.
Asian shares in general rebounded on Friday and the euro clawed higher, with European stocks also expected to make gains after brighter corporate news lifted US stocks and debt-laden Italy was able to fund itself at a bond auction. Southeast Asian bourses reported mild inflows on Friday. Malaysia had 4.44 million ringgit ($1.4 million), Indonesia $5.1 million and Manila $2.4 million, Thomson Reuters and stock exchange data showed.