Jakarta. Most Southeast Asian stock markets fell on Thursday (26/10), as recent strength in the US dollar pushed global funds to lock in gains in emerging markets, with Indonesia edging lower after marking record closing highs in the last two sessions.
The dollar took a breather on Thursday after having rallied over the past week on optimism over the prospects for US tax reforms, as well as speculation that the next chair of the US Federal Reserve could steer policy in a more hawkish direction.
The dollar index, which measures the greenback's value against a basket of six major currencies, hit a two-week high of 94.017 on Monday.
"Maybe the strong dollar would lead to a rotation of Asia emerging markets back to developed markets, like the United States, similar to what happened last year when [US President Donald] Trump was elected," said April Lee-Tan, head of research with the Manila-based COL Financial.
Investors rushed to US assets after the election of Trump late last year as they bet his expansionary fiscal policy would boost US growth, inflation and interest rates.
Indonesian shares fell after hitting a record high in early trade, with consumer discretionary and energy stocks weighing on the index.
Media solutions provider Elang Mahkota Teknologi slumped 13.6 percent, while Bank Central Asia was down 1.3 percent.
Philippine shares inched down 0.4 percent, as investors booked profits following gains to a record high last week.
The index has fallen in four out of the last five sessions.
Industrials and real estate stocks lost ground, with the Philippines' largest lender BDO Unibank down 0.8 percent and SM Investments Corp falling 1.4 percent.
"The short-term downtrend started after the index hit an all-time high... and we expected naturally some profit-taking.
So, we're just seeing a continuation of that today," said Fio Dejesus, an equity research analyst with RCBC Securities.
The index has gained about 21 percent so far this year, making it Southeast Asia's second-best performer after Vietnam.
The Thai stock market was closed for the funeral and cremation of revered late King Bhumibol Adulyadej.