July 8, 2019 / 10:03 AM / 3 months ago

SE Asia Stocks-Fall as strong US jobs data softens aggressive rate-cut hopes

    * Morgan Stanley to reduce global equities exposure
    * Thai stocks close flat, Singapore top loser 

    By Soumyajit Saha
    July 8 (Reuters) - Southeast Asian stock markets fell on
Monday, with Singapore shedding 1%, as strong U.S. jobs data for
June tempered hopes of sharp rate cuts by the U.S. Federal
    U.S. government employment in June grew the most in 10
months, as overall non-farm payrolls increased by 224,000 jobs.
In contrast, only 72,000 jobs were added in May.
    After the strong payrolls report, there are some concerns
that Fed Chair Jerome Powell may not be as aggressive as the
market had expected on rate cuts, said Stephen Innes, managing
partner at Vanguard Markets, in a note to clients.
    Hopes of sharp rate cuts by the Fed in the face of stumbling
economic data, especially under the weight of multiple tariff
tiffs that the United States has been involved in, have helped
markets retain their sheen over the last few months.
    Morgan Stanley's decision to reduce its global equities
exposure also soured investor mood. 
    "The market is too optimistic on 2019 earnings and is
underestimating the pressure from inventories, labour costs and
trade uncertainty," Morgan Stanley said in a research note.
    Singapore stocks fell the most in Southeast Asia,
weighed down by industrials and financials. The benchmark stock
index logged its biggest percentage drop in almost two months.
    Conglomerate Jardine Matheson Holdings Ltd dropped
1.5%, while lender DBS Group Holdings Ltd lost 1%.
    Philippine shares ended 0.8% lower, with index
heavyweights SM Prime Holdings Inc and SM Investments
Corp shedding 1.2% and 2.3%.
    Indonesian shares lost 0.3%, dragged by consumer and
financial stocks. 
    Cigarette maker PT Hanjaya Mandala Sampoerna Tbk
was down 2.8%, while lender Bank Central Asia Tbk PT
ended 1.5% lower.
    Thai shares closed flat after the central bank chief
expressed confidence in the economy.
    The economy's relative strength in comparison to peers in
the region has driven strong capital inflows so far this year. 
    Foreign investors have purchased a net $1.69 billion worth
of Thai equities so far this year.    
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 Change on the day                          
 Market             Current   Previous      Pct Move
 Singapore          3334.23   3366.81       -0.97
 Bangkok            1731.03   1731.23       -0.01
 Manila             8051.52   8117.94       -0.82
 Jakarta            6351.827  6373.477      -0.34
 Kuala Lumpur       1677.64   1682.53       -0.29
 Ho Chi Minh        966.35    975.34        -0.92
 Change so far in                           
 Market             Current   End 2018      Pct Move
 Singapore          3334.23   3068.76       8.65
 Bangkok            1731.03   1563.88       10.69
 Manila             8051.52   7,466.02      7.84
 Jakarta            6351.827  6,194.50      2.54
 Kuala Lumpur       1677.64   1690.58       -0.77
 Ho Chi Minh        966.35    892.54        8.27

 (Reporting by Soumyajit Saha, Additional reporting by Gaurav
Dogra; Editing by Subhranshu Sahu)
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