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Wednesday July 2, 6:40 PMSE Asian Stocks-Politics, inflation weigh on MalaysiaSINGAPORE, July 2 (Reuters) - Malaysian equities led losses in Southeast Asian stock markets as the country faced an uncertain political future on top of inflation pressures that battered stocks such as telecoms firm TM International .Global equities are being smothered by investors' fears over how stagflation, a combination of quickening inflation and slowing growth, could hurt consumer demand and corporate earnings. [nSP131963] A Reuters poll also showed Malaysia's economic growth would probably slow to a three-year low even as the ruling government clings tenaciously to power and faces accusations by key opposition leader Anwar Ibrahim of political conspiracy. [nSP128043] "I think generally investors have put a higher premium on the Malaysian market due to the current political uncertainty," said Michael Lai, fund manager at Fortress Capital Asset Management. On Tuesday, the Dow Jones Industrial Average dipped below 11,200 points in intra-day trading, spooking Asian markets as investors feared the index might break the level, he noted. Malaysia's benchmark index fell 1.8 percent, the Philippine index eased 0.9 percent, while Thailand shed 1.1 percent on banks and property. Top lender Bangkok Bank fell 3.4 percent, third-ranked Siam Commercial Bank gave up 3.2 percent, while the country's biggest developer, Land & Houses , fell 5.8 percent. Indonesia closed flat, while Singapore inched up just 0.08 percent but Vietnam bucked the trend to rise 2.4 percent, marking an eighth straight day of gains. "Some believe that financial statements for the second quarter, soon to be released by listed companies, would not be so gloomy as previously predicted," said Tong Minh Tuan, an economist at Bao Viet Securities Company. The emerging economy's growth slowed in the first half of this year, raising hopes that soaring inflation and rapid credit growth will ease. [nHAN171181] In Singapore, a profit warning from rival airline Cathay Pacific sent Singapore Airlines' share price down 2 percent, as investors feared soaring fuel prices would have the same effect on the world's most valuable airline. [nSIN319051] But analysts noted that for Cathay, fuel surcharges were subject to approval by authorities. "SIA is not subject to any such restrictions by Singapore authorities for flights out of Singapore, essentially having a free hand in raising fuel surcharges," analyst K Ajith of UOB Kay Hian said in a research note. Oil prices clung to near-record levels of above $141 as tensions between Israel and Iran brewed fears that supplies from OPEC's second-biggest oil producer might be disrupted. (Additional reporting Soo Ai Peng and Pham Hong Hanh; Editing by Clarence Fernandez) |
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