MANILA, Sept 6 — Most South-east Asian stock markets fell today as simmering tensions between North Korea and the United States continued to weigh on investor confidence.

A top North Korean diplomat warned yesterday Pyongyang was ready to send "more gift packages" to Washington as the two countries traded barbs following North Korea's biggest-ever nuclear test on Sunday.

"South-east Asian markets continue to retract as the geopolitical tension in North Korea continues to be a valid factor that dampens the sentiment in the markets," said Manny Cruz an analyst with Manila-based Asiasec Equities.

Philippine shares fell nearly 1 per cent, led by losses in financials and industrials. Index heavyweights SM Investments and Bank of the Philippine Islands fell 1.6 per cent and 1.7 per cent,

respectively.

Singapore shares fell 0.6 per cent, with financials accounting for most of the losses. DBS Group Holdings fell 0.8 per cent, while Oversea-Chinese Banking Corp fell 1.1 per cent.

Malaysian shares held steady after data showed better-than-expected exports in July, helped by higher shipments of manufactured products and mining goods.

Exports in July rose 30.9 per cent from a year earlier, beating a 23.1 per cent growth forecast by analysts in a Reuters poll.

"Lately, there has been some buying appetite among foreign funds for Malaysian equities so that is tempering pressure in the Malaysian markets, vis-à-vis the regional equities," said Manny Cruz.

Foreign investors bought shares net worth about RM103.1 million yesterday, according to Bursa Malaysia's daily participation data.

Materials and financials accounted for most of the gains, with Malayan Banking rising 0.6 per cent and Petronas Chemicals Group climbing 1.5 per cent.

Indonesian shares fell 0.2 per cent while Thai shares were down marginally. — Reuters