SE Asian markets fall as US tariffs kick in

By REUTERS

Most South-East Asian stock markets fell last Friday, with Singapore declining 2% to a 14-month closing low, as Washington’s tariffs on Chinese goods took effect, escalating fears of a full-blown trade war between the world’s top two economies.

US tariffs on US$34 billion (RM137.36 billion) of Chinese imports took effect at 0401 GMT, with Beijing saying it had no choice but to respond in kind.

“I think it’s becoming a game of who blinks first,” said Stephen Innes, head of trading for Asia Pacific at Oanda Corp.

A DBS Group Holdings Ltd analysis showed that South Korea, Malaysia, Taiwan and Singapore are the economies most at risk in Asia, based on trade openness and exposure to supply chains.

In South-East Asia, Singapore shares fell to their lowest close since May 2017, snapping two straight sessions of gain.

For the week, they dropped 2.4% in their fourth straight weekly fall.

Financials were the top drag with the city state’s top three lenders shedding more than 2% each.

Several real estate developers also slumped, a day after a surprise government move to tighten curbs on property in a bid to cool the market.

“The new rates will have a larger impact on investment demand.

“Hence, the outcome of the next few (project) launches will tell us what’s driving demand over the last few months,” said Liu Jinshu, director of research at NRA Capital Pte Ltd.

City Developments Ltd plunged 15.6%, while UOL Group Ltd slumped 13.6%. Malaysian shares fell 1.6% to their lowest close in nearly 1½ years, dragged by financial and telecommunication stocks.

CIMB Group Holdings Bhd and Axiata Group Bhd were down 4% and 6.3% respectively.

For the week, Malaysian shares declined 1.6% in their fourth consecutive weekly drop.

Philippine shares fell 0.7%, weighed down by industrial and real estate stocks, and posted a marginal drop for the week.

Ayala Land Inc slid 2.4% last Friday, while SM Investments Corp was off 1.2%.

Meanwhile, Vietnam shares erased early losses to close 2% higher, led by a rally in financials.

JSC Bank for Foreign Trade of Vietnam (Vietcombank) rose 5.8%, while Vietnam JSC Bank for Industry and Trade (Vietinbank) jumped 6.8%.

Vietnam shares closed 4.5% lower in their fourth straight weekly decline.

On another note, Thailand closed 0.8% higher and posted a weekly gain of 1.2%, snapping three weeks of decline.