SE Asia Stocks-Fall as Fed's Yellen makes stronger case for rate hike

By Aparajita Saxena

Aug 29 (Reuters) - Most Southeast Asian stock markets were

trading lower on Monday, in line with broader Asian peers, after

U.S. Federal Reserve Chair Janet Yellen hinted that a rate

increase was on the cards this year.

The probability of a rate hike in the near-term has gone up

after Yellen said that a lot of new jobs were being created and

economic growth would likely continue at a moderate pace, even

though data on Friday showed the U.S. economy growing only

sluggishly in the second quarter.

Comments by the Fed's No. 2 policymaker, Vice Chair Stanley

Fischer, have also bolstered the case for a rate hike this year.

The U.S. Fed will meet on Sept. 20-21 during which it is

expected to discuss the possibility of an interest rate

increase.

Markets will generally remain cautious before the September

meeting, and will also take cues from the U.S. jobs data due

Friday, said Ong Kian Lin at RHB Securities Singapore Pte Ltd.

"The most direct impact of the interest rate hike for

emerging markets is on the local currency versus the dollar,"

Ong said.

"Once the U.S. dollar strengthens, it will impact oil

producing countries that rely on the dollar movement for

inputs."

Indonesia fell, on track for a second straight

session of losses, led lower by utilities.

"Given investors were finding the right excuse to take

profit post the recent rally, we believe Yellen's speech would

have given investors the right excuse to sell," said Taye Shim,

an analyst with Daewoo Securities, in a note.

"We expect JCI (Jakarta Composite Index) to undergo a mild

correction today."

Plastic products manufacturer Langgeng Makmur Industri Tbk

PT, one of the biggest losers on the index, was down

9.76 percent.

Singapore shares eased 0.7 percent, with oil and gas

stocks losing ground after global oil prices fell about 1

percent on Monday.

Oil prices eased after Iraq's output rose and Iran said it

would only cooperate in producer talks to freeze output if

fellow exporters recognised its right to fully regain market

share.

Oil rig builders Keppel Corp and Sembcorp

Industries were among the biggest losers.

Thailand was flat, while the Philippine stock market

was closed for the National Heroes Day holiday.

Vietnam bucked trend to climb 1.3 percent, led by consumer

non-cyclicals.

Asian shares slid, with the MSCI's broadest index of

Asia-Pacific shares outside Japan extending

losses to 1 percent.

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SOUTHEAST ASIAN STOCK MARKETS

STOCK MARKETS

Change at 0411 GMT

Market Current Previous close Pct Move

Singapore 2836.57 2857.65 -0.74

Bangkok 1543.42 1549.41 -0.39

Jakarta 5372.186 5438.831 -1.23

Kuala Lumpur 1679.89 1683.09 -0.19

Ho Chi Minh 676.16 667.75 1.26

Change on year

Market Current End 2015 Pct Move

Singapore 2836.57 2882.73 -1.60

Bangkok 1543.42 1288.02 19.83

Jakarta 5372.186 4593.008 16.96

Kuala Lumpur 1679.89 1692.51 -0.75

Ho Chi Minh 676.16 579.03 16.77

(Reporting by Aparajita Saxena in Bengaluru; Editing by Biju

Dwarakanath)