Major Southeast Asian markets jumped on Thursday in heavy volumes after the world's six major central banks moved to ease a liquidity crunch squeezing European banks. Investor poured into regional markets. Malaysia enjoyed a $104.9 million net foreign inflow, while Indonesia saw $69.2 million in net foreign buying. The Philippines witnessed a six-month high foreign inflow of $46.5 million.
Thailand received an inflow of $54.7 million. The US Federal Reserve, the European Central Bank and the central banks of Canada, Britain, Japan and Switzerland said on Wednesday they would lower the cost of existing dollar swap lines by 50 basis points from December 5, and arrange bilateral swaps to provide liquidity for other currencies.
"Sentiment is still being driven by the central banks' action solve Europe's debt issue," said Grace Crisostomo-Cerdenia, chief operating officer at Manila-based Yapster e-Trade, a licensed online stockbroker. Indonesia gained 1.8 percent and Singapore jumped 2.2 percent to their highest closes since November 17. The Philippines rose 1.9 percent, Thailand jumped 2.4 percent to a 10-week high and Malaysia added 0.9 percent to its highest close since November 9.
Investor sentiment was also lifted by China's announcement late Wednesday to cut the reserve requirement ratio for commercial lenders for the first time in three years, signalling a policy shift as global weakness weighs on China's economy. MSCI's broadest index of Asia Pacific shares outside Japan jumped 4.13 percent at 0957 GMT, with major Asia markets gaining on Thursday due to eurozone optimism.
Banks helped the region's markets with Jakarta's top lender Bank Mandiri and micro lender Bank Rakyat Indonesia each rising more than 3 percent, while Bangkok's CIMB Thai Bank PCL leaping 29.8 percent. In Singapore, DBS Group Holdings Ltd and United Overseas Bank gained more than 3.3 percent while Malaysia's Malayan Banking and CIMB Group Holding Berhad rose more than 1 percent.
In Manila, Bank of the Philippines Islands gained 3.1 percent with the stock seeing the biggest jump in 5-day average volume versus its 30-day average among Philippine stocks. In Jakarta, small-cap companies gained on Thursday, a day after Morgan Stanley added 16 local firms to its MSCI Global Small Cap Indices with media broadcaster PT Indosiar Karya Media Tbk jumping 17.1 percent, and paper manufacturer PT Fajar Surya Wisesa Tbk gaining 13.7 percent.