September 5, 2018 / 4:27 AM / 21 days ago

SE Asia Stocks-Philippine index plunges as inflation bites; Indonesia sinks

    * Indonesia falls for fifth straight session
    * Philippine index sees worst day in more than three weeks

    By Sumeet Gaikwad
    Sept 5 (Reuters) - Philippine shares plunged on Wednesday
after inflation quickened at the fastest pace in more than nine
years, while Indonesian stocks tumbled as the rupiah lingered
near two-decade lows.
    Higher prices for food, alcohol and tobacco pushed the
Philippine consumer price index up 6.4 percent in August and
past expectations, raising the odds for a fourth interest rate
hike this year.
    The central bank meets on Sept. 27 and investors will look
for cues about a potential increase in interest rates.
    The Philippine stock index fell nearly 2 percent, its
biggest one-day drop in more than three weeks. SM Investments
Corp led the decline, falling 1.7 percent, while SM
Prime Holdings shed over 2 percent.
    "There are notions that inflation may continue to go higher
within the next couple of months," said Manny Cruz, an analyst
at Manila-based Asiasec Equities.
    Indonesia's Jakarta index fell 3.1 percent - its
fifth straight session of losses - and was poised for only its
second decline of more than 3 percent since November 2016.
    The rupiah hovered around its lowest level since
1998, adding to a 9 percent fall this year.
    "The contagion that affected Turkey and Argentina has slowly
affected other emerging markets, like Indonesia. If you look at
the patterns, there are some parallels between Indonesia and
Philippines," Cruz said.
    Emerging markets have been pressured by rising U.S. interest
rates and treasury yields, and worsening Sino-U.S. trade
relations. That has been exacerbated by economic woes in Turkey
and Argentina.
    Fresh U.S tariffs on $200 billion worth of Chinese goods are
expected to take effect after a public comment period ends
Thursday.
    "One of the key factors that's driving this market turmoil
is President Trump," said Taye Shim, head of research at Mirae
Asset Sekuritas. "Until the trade rhetoric subsides, investors
will likely take risk off their balance sheet."
    Top Indonesian lender Bank Central Asia was the
biggest drag on the benchmark, falling 3.6 percent, while
diversified conglomerate Astra International slipped
nearly 4 percent.
    An index of the country's 45 most liquid stocks 
was down nearly 4 percent.    
    Malaysian stocks fell 0.3 percent, while Thai shares
 were down 0.6 percent.
        
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SOUTHEAST ASIAN STOCK MARKETS: CHANGE AS AT 0415 GMT
 Change on the day                            
 Market             Current   Previous close  Pct Move
 Singapore          3184.34   3210.51         -0.82
 Bangkok            1704.4    1714.41         -0.58
 Manila             7749.63   7881.82         -1.68
 Jakarta            5716.162  5905.301        -3.20
 Kuala Lumpur       1806.94   1812.76         -0.32
 Ho Chi Minh        976.97    975.94          0.11
                                              
 Change on year                               
 Market             Current   End 2017        Pct Move
 Singapore          3184.34   3402.92         -6.42
 Bangkok            1704.4    1753.71         -2.81
 Manila             7749.63   8558.42         -9.45
 Jakarta            5716.162  6355.654        -10.06
 Kuala Lumpur       1806.94   1796.81         0.56
 Ho Chi Minh        976.97    984.24          -0.74
 
 (Additional reporting by Nikhil Nainan in Bengaluru
Editing by Sai Sachin Ravikumar)
  
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