SINGAPORE, Sept 5 — Most Southeast Asian stock markets fell this morning as simmering tensions on the Korean Peninsula continued to hurt sentiment, while Singapore shares gained after data showed factory activity in August rose at the fastest pace in nearly three years.

South Korea said this morning an agreement with the United States to scrap a weight limit on its warheads would help it respond to North Korea’s nuclear and missile threat after Pyongyang conducted its sixth and largest nuclear test two days ago.

The White House declared yesterday “all options to address the North Korean threat are on the table”.

“Today, regional markets are down, this is basically on the back of renewed tensions in North Korea”, said Lexter Azurin, a senior analyst with Manila-based AB Capital Securities.

However, Singapore shares rose 0.3 per cent, after data released yesterday evening showed Singapore manufacturing PMI in August rose to 51.8 from 51.0 in July, boosted by a rise in new orders, new exports and factory output.

Financials outperformed all other sectors, with index heavyweights DBS Group Holdings and Oversea-Chinese Banking Corp gaining 1.3 per cent and 0.5 per cent, respectively.

Philippines shares fell 0.5 per cent despite upbeat CPI data that showed that the country’s annual inflation accelerated for a second straight month.

Annual inflation in August picked up to 3.1 per cent from 2.8 per cent in July, slightly higher than market expectations of 3.0 per cent, but within the central bank’s forecast range of 2.6-3.4 per cent.

Inflation remaining within the Philippine central bank’s target range does not necessarily mean that it will continue to keep rates steady at current levels, DBS Group analysts said in a note.

“At this juncture, there is still a good chance to see a 25bps rate hike by the year-end,” DBS said.

Industrials and financials were the biggest drags on the index, with JG Summit Holdings falling 1.7 per cent and SM Investments Corp down 0.7 per cent.

Indonesian shares fell 0.3 per cent, with the country’s largest telecom company by market cap, Telekomunikasi Indonesia, falling 1.1 per cent to its lowest in six weeks and Unilever Indonesia losing 1.1 per cent.

Malaysian shares were down 0.3 per cent and Thai shares posted meagre losses. — Reuters