Vietnam stocks hit hardest in SE Asia as rising US yields choke risk appetite

By Reuters, VnExpress   February 6, 2018 | 09:21 am GMT+7

Vietnam has recorded its steepest fall in nearly two and a half years.

Southeast Asian stock markets plunged on Monday as rising U.S. bond yields on worries over the prospect of higher interest rates rattled equity investors, with Vietnam shedding five percent to record its steepest fall in nearly two and a half years.

Asian shares fell their most in over a year after fears of resurgent inflation toppled Wall Street on Friday from all-time highs.

Vietnamese shares plummeted 5 percent on Monday, one week before Tet, the biggest holiday of Vietnamese people when they celebrate a new lunar year, marking their worst day since August, 2015.

Experts in the field say investors' strong tendency to sell shares to call it a year before Tet has affected the country's stock market.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped as much as 2 percent, extending losses into a third straight session.

“There is a cautious mood currently because of the sudden surge in yields, so I think markets are trying to adapt to this changing environment of changing yields and expectations of higher inflation going forward,” said Joel Ng, a research analyst at KGI Securities in Singapore.

Global bond yields have been rising on expectations of improving global growth, which has investors worried about the impact of rising borrowing costs on consumers and companies.

Shares in Singapore closed 1.3 percent lower as financial stocks dragged the index lower.

Top lenders Oversea-Chinese Banking Corp and DBS Group Holdings suffered their worst session in over a month, while United Overseas Bank fell to a four-week low.

Although higher interest rates tend to bode well forlenders, a sudden or much faster rise in yields will cause some problems in the equity markets, Ng added.

The final numbers of the day are shown above the floor of the New York Stock Exchange in New York, U.S., February 5, 2018. Photo by Reuters/Brendan McDermid

The final numbers of the day are shown above the floor of the New York Stock Exchange in New York, U.S., February 5, 2018. Photo by Reuters/Brendan McDermid

Indonesian shares recouped part of their early losses after data showed the economy grew at its fastest pace in four years in October-December.

Consumer stocks weighed heavy on the index, with Astra International Tbk PT falling as much as 2.9 percent.

Unilever Indonesia Tbk PT closed 1.1 percent lower. Philippine shares closed 2.2 percent lower as heavyweights SM Prime Holdings and SM Investment witnessed selling pressure.

Thai and Malaysian shares closed around one percent lower.

 
 
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