September 26, 2018 / 10:17 AM / 24 days ago

SE Asia Stocks-Singapore erases gains to close slightly higher, Philippines extends falls

    By Devika Syamnath
    Sept 26 (Reuters) - Singapore shares gave up most of their
early gains on Wednesday after data showed factory output growth
in August slowed more than expected, while Philippine stocks
weakened for a second straight session ahead of an expected rate
hike on Thursday.
    Investors were also cautious as they weighed how much more
policy tightening is in store from the U.S. Federal Reserve. Fed
funds rates futures implied traders are fully pricing in a rate
hike on Wednesday, plus an 85 percent chance of another rise in
December.
    "Asia equity markets had traded defensively in the afternoon
session giving back early morning gains... with an FOMC (Federal
Open Market Committee) main event on tap tonight, position
squaring is dominating market sentiment," Stephen Innes, APAC
head of trading at OANDA, said in a note.
    Singapore's FTSE Straits Times Index climbed 0.9
percent in intraday trade, before erasing most of the gains to
close 0.1 percent higher, marking its sixth consecutive session
of gains.
    Manufacturing output in August rose 3.3 percent from a year
earlier, data from the Singapore Economic Development Board
showed, slower than the revised 6.7 percent growth in July. The
median forecast in a Reuters survey predicted a 4.4 percent
expansion.
   Industrial stocks were the top gainers with Jardine Matheson
 gaining 1.1 percent, while Oversea-Chinese Banking
Corp was the biggest drag with a drop of 0.5 percent.
    Among other markets that gained, Thai stocks snapped
two consecutive sessions of falls, helped by energy and real
estate stocks. PTT PCL rose 0.5 percent to its highest
close in over 4 months and was among the top boosts.
    Meanwhile, Philippine stocks closed 0.9 percent
lower, making them the top losers in the region.
    The selloff was due to a number of factors, including
expectations of higher inflation, expected rate hike by the
central bank, and macroeconomic factors such as the impact of
the trade war and higher oil prices, said Rachelle C. Cruz, an
analyst with Manila-based AP Securities.    
    The central bank is widely expected to raise its key
interest rate by another 50 basis points on Thursday, in a bid
to tamp down inflationary pressures, which have been steadily
rising since January due to higher taxes, a weak peso, and
rising food and fuel costs.
    The Philippines' finance minister said on Tuesday the main
concern for him was the recent rise in oil prices.
    Cruz echoed the view, saying the recent rally in oil prices
added to pressure on the Philippines which is a net importer of
crude.
    Indonesian shares reversed their course to close
slightly lower, with losses in energy counters outweighing gains
in financials.
    United Tractors Tbk PT declined 3.2 percent, while
 Bank Central Asia Tbk PT rose 1.2 percent.
    "Indonesia's central bank begins their two-day-long policy
meeting today with our expectation that the benchmark rate will
be increased by 50 bps," OCBC said in a note to clients.
        
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SOUTHEAST ASIAN STOCK MARKETS
    
 Change on day                             
 Market          Current   Previous Close  Pct Move
 Singapore       3239.1    3236.08         0.09
 Bangkok         1749.93   1747.99         0.11
 Manila          7268.21   7332.17         -0.87
 Jakarta         5873.271  5874.299        -0.02
 Kuala Lumpur    1798.72   1794.47         0.24
 Ho Chi Minh     1009.61   1010.74         -0.11
                                           
 Change on year                            
 Market          Current   End 2017        Pct Move
 Singapore       3239.1    3402.92         -4.81
 Bangkok         1749.93   1753.71         -0.22
 Manila          7268.21   8558.42         -15.08
 Jakarta         5873.271  6355.654        -7.59
 Kuala Lumpur    1798.72   1796.81         0.11
 Ho Chi Minh     1009.61   984.24          2.58
 

 (Reporting by Devika Syamnath in Bengaluru; Editing by
Subhranshu Sahu)
  
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