BEIJING, China – Southeast Asian stocks mostly slipped on Friday, weakened by the increasing worries that the signing of the US law backing Hong Kong pro-democracy protesters could spark retaliatory action from the Chinese government.
Early in the week, the increasing optimism on the trade agreement between the US and China has powered up gains for most of the global market with some even reaching new record highs as sentiments from both Washington and Beijing suggest reaching phase one of trade deal is possible before the year ends. However, the trading week is ending on an opposite note from when it began as market players grow increasingly concerned that the recent tension between the two of the biggest world economies about the Hong Kong bill could derail the previously positive trade deal.
After the news that the US President Trump signed two laws in support of the protesters in the Chinese-ruled city, all eyes are trained in China, waiting for the response from the officials in the country.
Based on the note from the OCBC Treasury, the market is largely on the lookout for the possible countermeasures from the Chinese government.
Further, market players were also cautious before the release of the official data on factory activity in China which is expected to be posted on Saturday with an expected seven months straight of decline in November amid the dull domestic demand.
Most of SE Asian shares were majorly affected by the decline in the global market with the Malaysian index tracking declines, which was further dragged down by the posted 75% dip for the 3rd quarter profit of the biggest oil palm planter, Sime Darby Plantation Bhd. Declines in other big caps including the lender Hong Leong Bank and electricity retailer Tenaga Nasional also weighed in on the loss for the index.
Thai equities also marked its fourth consecutive session of falls and recording its fifth straight month of declines. It followed the 5% decline on the year-over-year exports of the country for October, which was released earlier today.
Philippine shares also edged lower on Friday, shedding about 3% in November, marking its worst monthly action since February, with the 0.9% decline in conglomerate SM Investments one of the top losers.
Singapore index also tracked losses for the day, marking its biggest weekly declines since two months ago.
On the other hand, Indonesian stocks bucked the trend as it snapped from the six straight sessions of losing streak. However, it still closed the week with the worst monthly performance since six months ago.