March inflation accelerated to a 32-month high of 5.4 percent year-on-year, Hong Kong media said on Thursday, a day ahead of the official data release. Analaysts recently polled by Reuters had predicted it would quicken to 5.2 percent. [ID:nL3E7FE0EO]
"This may lead China to tight monetary policy again," Song Seng Wun, a regional economist at Singapore-based CIMB-GK Research told Reuters.
China's central bank has already increased benchmark interest rates four times since last October and has required the country's big banks to put a record high of 20.0 percent of their deposits with the central bank as reserves to curb inflation.
Further policy tightening by Beijing could pressure emerging markets in Southeast Asia and riskier assets in general if investors feel it will slow China's insatiable demand for raw materials and other goods.
So far, most tightening measures have sparked an immediate but brief sell-off in regional or global equity markets, and they have recouped the losses fairly quickly.
Singapore lost 0.4 percent after its Monetary Authority tightened monetary policy slightly to fight against rising inflation, helping push the local currency to record highs, but declines were capped by strong first quarter economic growth. [ID:nL3E7FD0HX]
Indonesia fell 0.7 percent to its lowest close since April 4, led by financial shares with $35.7 million of foreign outflows.
Malaysia closed 0.6 percent weaker at a two-weak closing low, but enjoyed a $25.2 million net foreign inflow, while Vietnam edged down 0.1 percent.
Analysts also attributed some of the Singapore market's losses to a technical correction, noting the index had pushed into overbought territory in the previous session, but added that sentiment was still seen as bullish.
"Our strong GDP figures are driving sentiment, and with expectations that the Singapore dollar is likely to gain, holders of Singapore equities would also benefit," said a local institutional trader.
Bucking the falling trend, rigbuilding and engineering conglomerate Sembcorp Industries gained 1.3 percent, after it said it was considering building water treatment plants as well as a large commercial, residential and industrial zone in eastern China.
In Jakarta, Asia's biggest thermal coal exporter Bumi Resources fell 1.5 percent after it said it was in talks with China Investment Corp (CIC) on the possible swap of $600 million debt into equity. [ID:nL3E7FE0ZZ]
Bucking the weak regional trend, the Philippines benchmark share index gained 0.7 percent to a near one-weak high, helped by property shares with over 1.8 percent gain in Ayala Land .
The country's largest developer said on Wednesday it was looking to bid for public-private partnerships for toll road and rail projects that will be put up for auction by the government. [ID:nL3E7FD175]
Bourse operator Philippines' Stock Exchange , which announced a 100 percent dividend, jumped 32.9 percent.
"A sudden surge in PSE share price set the general tone for today's trading, giving investors some buying confidence," Manila-based Accord Capital stated in a investor note. For the latest updates PRESS CTR + D or visit Stock Market news Today
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