SINGAPORE, June 13 — Most South-east Asian stock markets declined today, in line with broader Asia ahead of the US Federal Reserve's policy decision which could give cues on future rate hikes.
The Fed is widely expected to raise interest rates for the second time this year after a move in March, but the bigger question for investors is the outlook for future monetary tightening amid an ongoing economic expansion.
“Trading volumes are a bit lower than average. A lot of investors are staying on the sidelines ahead of the Fed's decision today and comments from the ECB (European Central Bank) tomorrow,” said Joel Ng, an analyst at KGI securities.
“I don't think the rate decision will be negative for the markets, it's just that markets are a bit slower in June.”
The ECB will debate whether to end a €2.55 trillion (RM12 trillion) bond purchase scheme this year as inflation is on the rise and growth has lasted five years.
Philippine shares fell as much as 2.5 per cent, their sharpest in nearly six weeks, on resumption of trade after the Independence Day holiday yesterday.
SM Investments Corp declined as much as 3.3 per cent, JG Summit Holdings dropped 4.9 per cent and BDO Unibank Inc fell 4 per cent.
Singapore shares fell nearly 1 percent to their lowest since April 6, dragged by the city-state's big banks. United Overseas Bank, DBS Group Holdings and Oversea-Chinese Banking Corp Ltd all shed over 1.5 per cent.
Malaysian shares extended their fall into a fourth session with Public Bank, the country's largest lender by market capitalisation, declining nearly 2 per cent.
Thai shares fell after two straight sessions of gain, while Vietnam was little changed following a sharp drop in the previous session.
Indonesian financial markets are closed until June 19 for Eid Al-Fitr. — Reuters