* Investors watch for signs of thaw in the U.S.-China trade
war
* Indonesia set to snap eight sessions of gains
* Singapore marks worst session in two weeks
By Sameer Manekar
Oct 23 (Reuters) - Southeast Asian stock markets dropped on
Wednesday, with the Philippines leading declines, on prolonged
U.S.-China trade spat and as investors locked in profits
following a recent rally.
Investors are also closely watching for signs of a thaw in
the U.S.-China trade war, which has cast a shadow over financial
markets and global economic growth.
An exclusive Reuters report that one of the U.S. advisers to
U.S. President Donald Trump on trade talks with China will leave
government could introduce some uncertainty about future trade
talks. Shares in Singapore, which is highly vulnerable to headlines
coming out of the trade talks, declined with the Straits Times
index .STI marking its worst session in two weeks.
"Blue-chips suffered profit-taking activities after big
gains over the last two days," CMC Singapore Markets said in a
note.
Financials and industrial sectors dragged the Singapore
index lower, with City Developments CTDM.SI and Jardine
Matheson Holdings JARD.SI shedding 1.7% and 2.5%,
respectively.
"A healthy correction, however, does not change our view
that emerging markets are on their upward trajectory to narrow
the valuation gap with developed markets," the note cited.
Leading declines in the region, the Philippine bourse .PSI
slipped 0.7%, dented by losses in financials and consumer firms.
"Investors are still on the sidelines waiting for the
partial trade deal or the potential phase one deal between the
United States and China," Rachelle Cruz, analyst at AP
Securities said, adding that markets are seeing a correction
after the previous sessions' gains.
BDO Unibank BDO.PS and SM Investments Corp SM.PS were
among the biggest losers, slipping 1.7% and 1.2%, respectively.
The Indonesian market .JKSE was set to snap an
eight-session winning streak, with consumer and healthcare
sectors falling the most.
Auto manufacturer Astra International ASII.JK and pharma
company Kalbe Farma KLBF.JK lost 1.5% and 1.8%, respectively.
Bank Indonesia on Thursday is expected to cut its benchmark
rate for a fourth consecutive month to support the economy, a
Reuters poll showed. Malaysian shares .KLSE retreated from previous session's
gains to drop 0.6%, with Hong Leong Financial Group HLCB.KL
and Sime Darby Plantation SIPL.KL slipping 2.6% and 1.9%,
respectively.
The country's inflation rose at a slower pace than expected
in September from a year earlier, data showed on Wednesday. In
May, Bank Negara Malaysia cut its key interest rate for the
first time since 2016, amid low inflation and concerns over
slowing growth. Thailand markets were closed for a holiday.
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SOUTHEAST ASIAN STOCK MARKETS AS AT 0438 GMT
Market Current Previous close Pct Move
Singapore 3139.99 3160.67 -0.65
Manila 7898.03 7955.24 -0.72
Jakarta 6217.939 6225.497 -0.12
Kuala Lumpur 1564.92 1574.09 -0.58
Ho Chi Minh 986.23 987.19 -0.10
Change so far in 2019
Market Current End 2018 Pct Move
Singapore 3139.99 3068.76 2.32
Bangkok 1631.46 1563.88 4.32
Manila 7898.03 7,466.02 5.79
Jakarta 6217.939 6,194.50 0.38
Kuala Lumpur 1564.92 1690.58 -7.43
Ho Chi Minh 986.23 892.54 10.50