Southeast Asian stock markets fell on Monday, led by commodities-related and banking shares, after eurozone sovereign rating cuts by Standard & Poor's rekindled concerns about the euro zone's debt crisis. S&P downgraded nine of the eurozone's 17 countries, including top-notch France and Austria, and said it would decide shortly whether to downgrade the euro zone's bailout fund.
Southeast Asia saw light trading, with markets awaiting bond auctions by France and Spain later this week, seen as another big test of investor confidence in the euro zone. Leading losers, Singapore's Straits Times Index dropped 1.26 percent, after Friday's 1.8 percent climb to five-week highs. Traders said retail and short-term traders might sell further during the week due to demand for cash ahead of the Chinese New Year holidays.
The Philippines' main index fell for a second session, ending 0.76 percent lower. It had surged to a record high last week amid foreign inflows and demand for consumer-related stocks due to the prospect of lower interest rates.
Manila took in $191 million in foreign inflows in the 11 sessions to Friday, according to Thomson Reuters data. Brokers said the inflows came from global funds seeking good returns. "Portfolio money has came into emerging markets like the Philippines," said analyst Jose Vistan of AB Capital Securities Inc in Manila. "It may be staying for a while because of low yields that we are experiencing globally, plus the fact that most of the markets are depressed," he said.
Stocks in Malaysia fell 0.92 percent, Indonesia eased 0.65 percent and Thailand lost 0.75 percent. Bucking the trend, Vietnam's Ho Chi Minh Stock Exchange index rose for a sixth session, adding 1 percent to its highest in almost four weeks. It could extend gains this week on demand for blue chips from institutions and foreigners, traders said.
Sentiment elsewhere in Asia was weak, with MSCI's broadest index of Asia Pacific shares outside Japan slipping 1.05 percent by 0415 GMT. Among actively traded, Singapore's DBS Group Holdings Ltd dropped 2.9 percent after Friday's 4.2 percent surge to two-month highs. Coal miners fell, with Thai Banpu Pcl down 1.4 percent and Indonesia's PT Adaro Energy Tbk sliding 1.7 percent.
In Manila, property shares reversed last week's gains, with Ayala Land Inc falling 3.9 percent. Ayala Land, along with other property shares, has outperformed the market this year on expectations that low interest rates would boost property demand. It has surged 13.2 percent, trailing the 19.7 percent jump in Robinsons Land Corp, the Philippines' best performance this month. Lower Philippine inflation for December has bolstered hopes of a rate cut by the central bank this month.