SE Asia stocks most slip on global oil supply fears; Indonesia gains

Reuters: Most Southeast Asian stock markets fell yesterday (9 May) in line with broader Asia, after oil prices sky-rocketed to an over 3-year high as President Donald Trump pulled the United States out of the Iran nuclear deal, while Indonesian shares surged.

MSCI’s broadest index of Asia-Pacific shares outside Japan dipped as renewed US sanctions on Tehran could be disruptive for many companies that have deals with Iran. Oil prices rose as much as 2.8%, likely curbing Iran’s crude exports in an already tight market. “Asian markets are quite susceptible to foreign pressure because they are heavily dependent on oil,” said Manny Cruz, an analyst at the Manila-based Asiasec Equities Inc.

Inflation is a concern for most Asian economies and it may impair growth in the near term if oil prices stay above $70 per barrel, he said. “That will continue to weaken sentiment in equities.”

An International Monetary Fund (IMF) official said the IMF was not too worried about recent selling pressure on assets in Indonesia and the Philippines as it was not triggered by domestic factors. 

Indonesian shares erased early losses to end 2.3% higher, their biggest daily gain in a year. PT Unilever Indonesia rose 5.1%, while PT Bank Central Asia ended 4% higher.

An index of Indonesia’s 45 most liquid stocks rose 3.7%.

Among markets that fell, Philippines ended 0.3% lower, with financials leading falls. Security Bank Corp lost 4%.

The Philippine Statistics Authority released preliminary data earlier in the day, indicating that trade deficit for March had narrowed. Singapore closed marginally higher. Keppel Corp, a holding company engaged in offshore oil rigging, ended 2.6% higher. Thai index slipped 0.1%, its lowest close in three weeks, with gains in energy stocks curbed by losses in telecom. Natural gas suppliers PTT Public edged 1.8% higher, while telecom services provider Advanced Info Services shed 4.4%.

Malaysia was closed for general elections.