SE Asia stocks fall after N.Korea missile launch hits sentiment


A man walks past a TV broadcasting a news report on North Korea's missile at a railway station in Seoul. The missile launch put pressure on stock markets in Southeast Asia. (Reuters photo)

Southeast Asian stock markets fell on Tuesday tracking weak regional markets after North Korea test-fired a missile that landed in Japanese waters, pressuring riskier assets.

The missile, launched days before leaders from the Group of 20 nations are due to discuss steps to rein in Pyongyang's weapons programmes, flew a trajectory that an expert said could allow a weapon to hit the US state of Alaska.

"North Korea's missile deployment to Sea of Japan is a sign of increasing intensity of security risk in the region," said Jim McCafferty, head of equity research for Asia ex-Japan at Nomura in Hong Kong.

Global equity markets were weighed down late last week by worries that major central banks were turning hawkish, possibly signalling a coordinated end to years of ultra-loose monetary policy on both sides of the Atlantic.

Asia, however, has had its bright spots, as this week's manufacturing surveys showed.

Private sector surveys of manufacturers in Asia showed the factory sectors of China, South Korea, Japan, Singapore and Taiwan picked up in June, driven largely by a recovery in exports.

In southeast Asia, Indonesian shares ended the day 0.8% lower as telecommunication and consumer shares weighed on the index.

Telekomunikasi Indonesia (Persero) Tbk PT dropped as much as 4.2%, posting its biggest intraday percentage loss since Nov. 2016.

Malaysian shares ended the day 0.4% lower. Petronas Gas Bhd was down as much as 1.60%. 

Malaysian palm oil futures fell on Tuesday from a two-week high on profit-taking and as the market tracked a weaker performance in related oils on China's Dalian Commodity Exchange.

Philippine shares closed 0.4% lower, hurt mostly by financials, real estate and industrial stocks.

Index heavyweight JG Summit was the biggest drag with a drop of 1.5%.

The Philippines has been one of the best performing equity markets in southeast Asia this year when adjusted for local currency, according to Thomson Reuters data.

Singapore closed 0.4% lower, posting its third straight session of decline.

Financials dragged the index lower, with Oversea-Chinese Banking Corporation slipping as much as 1.5%.

Southeast Asian stock markets





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