The Stock Exchange of Thailand index plunged, while most Southeast Asian stock markets dropped on Monday following their Chinese peers, which fell despite the country’s central bank increasing liquidity to offset the fallout of a months-long US-China trade row.
Sino-US tensions intensified over the last week with US Vice President Mike Spence accusing China of meddling in next month’s congressional elections and a report that Chinese spies had compromised US hardware.
“There is negative impact from the Chinese stock market because the central bank’s measure cannot fully offset the negative sentiment from last week,” said Rakpong Chaisuparakul, an analyst at KGI Thailand.
The People’s Bank of China on Sunday cut the minimum cash reserve that banks must hold, in a move to support the economy.
Chinese markets reacted for the first time, after a week-long holiday, to last week’s surge in benchmark US Treasury yields and strong economic data which sparked concerns of a faster-than-expected rate hike by the Federal Reserve.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.9% lower.
The SET index plunged 24.30 points or 1.41% to 1,696.22, in trade worth 59 billion baht.
Thai shares extended losses into a fifth session, weighed down by energy and materials sector. PTT Exploration and Production Plc declined 3.3% while Indorama Ventures Plc slumped 5.7%.
Singapore’s benchmark index continued to decline, closing lower for a third straight session, ahead of possible tightening of monetary policy by the central bank this week.
The Monetary Authority of Singapore is expected to tighten monetary policy at Friday’s review, in an attempt to balance the risks of growth and inflation amid global trade frictions.
United Overseas Bank fell 2.1% and conglomerate Jardine Matheson Holdings slid 1%.
Indonesia stocks bucked the trend to rise 0.5%, with financial and consumer shares boosting the index. Bank Central Asia gained 1.7% and Unilever Indonesia advanced 3.6%.
The country’s central bank has intervened to manage the rupiah’s volatility, a senior official told Reuters on Monday, after the currency weakened to its lowest in over 20 years.