Most South-east Asian stock markets were flat to lower on Friday as an overnight decline in commodity prices raised concerns about the health of the global economy, while the Philippines extended gains on positive inflation data. Chinese iron ore futures fell nearly 7 percent in opening trades, and copper held near four-month lows, following its biggest one-day drop in 20 months in the previous session.
Oil prices fell further on Friday to be mired at five-month lows after tumbling in the previous session, as concerns about global oversupply wiped out all of the price gains since OPEC’s move to cut output. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, trading at their lowest since April 25.
The markets are “mainly focusing on slump in the overnight commodity prices, especially oil. There’s really a lack of faith with OPEC production cuts. Investors are losing faith that such measures could actually lead to stabilization in prices,” said Victor Felix, equity analyst, AB Capital Securities.
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However, Philippine shares extended gains to hit their highest in more than eight months, buoyed by industrials, real estate and financials. “This morning, the inflation data was released. We are within the target of the central bank and we didn’t have a higher-than-expected inflation figure, so I think the market reacted positively to that,” said Felix. The annual rate of consumer price inflation in Philippines was unchanged at 3.4 percent in April, slightly below economists’ forecast for an increase to 3.5 percent, and within the central bank’s 3.0-3.8 percent projection for the month.
Singapore shares were on track to post their second session of losses, dragged by industrials and financials. Jardine Matheson Holdings hit a two-week low, while DBS Group Holdings slid as much as 0.9 percent. Indonesia remained unchanged after the release of first-quarter GDP data earlier in the day. Southeast Asia’s largest economy grew 5.01 percent in January-March on an annual basis. Thai shares slipped, while Malaysia posted marginal gains as data showed March exports surged 24.1 percent from a year earlier, beating forecasts.
(Reporting by Christina Martin; Editing by Sherry Jacob-Phillips)