Most Southeast Asian stock markets shrugged off Moody's downgrade of its sovereign credit rating on China to edge up on Wednesday, focusing instead on what the minutes of a US Federal Reserve meeting would say on its rate hike trajectory. The minutes of the US central bank's latest policy meeting is scheduled to be released at 1800 GMT, with Fed funds futures showing that traders now see a 75 percent chance the Fed will raise interest rates at its June meeting.
"Regional markets are also awaiting the FOMC (Federal Open Market Committee) minutes, which will give some signal and confirmation with regards to the movement of the Fed in the next few months," said Lexter Azurin, a senior analyst at Manila-based AB Capital Securities.
Earlier in the day, China's benchmark stock indexes fell more than 1 percent after Moody's Investors Services cut the country's debt ratings, citing expectations that the financial strength of the world's second-biggest economy would erode over the coming years. The indexes later recouped most of the losses to close nearly unchanged. Asia-Pacific stocks ex-Japan also tracked Chinese markets to trade 0.3 percent lower initially, but reversed losses to nudge up later in the day.
In Southeast Asia, Philippine shares finished 0.3 percent higher, their fourth straight day of gains, helped by real estate stocks and consumer staples. Ayala Land gained 2.2 percent, while food processing company Universal Robina Corp hit a near two-week high. Singapore shares climbed 0.3 percent by the close of trade, boosted by financials and industrials, while Malaysia posted a marginal increase.
Thailand was little changed after the central bank left its key interest rate where it has been for more than two years, saying the 1.50 percent level continues to support economic recovery. Indonesia shares however closed 0.5 percent lower, their third consecutive session of losses, dragged down by financials and consumer staples, with an index of the 45 most liquid stocks down 0.6 percent.
"The (China) downgrade has pulled (Indonesia's) overall sentiment towards the negative side... It's also some profit-taking," said Elvira Tjandrawinata, head of Indonesia equity research at Nomura Securities. Bank Rakyat Indonesia (Persero) Tbk PT lost 2.3 percent, while consumer goods manufacturer Unilever Indonesia Tbk PT dropped nearly 2 percent.