SE Asia Stocks-Fall as trade hopes recede; U.S.-North Korea no-deal weighs

* Vietnam shares plunge 2.5 pct, top loser in region

* Philippine stocks worst performer in February

By Shriya Ramakrishnan

Feb 28 (Reuters) - Southeast Asian stock markets fell

sharply on Thursday after a U.S. warning that there was still a

long road ahead to resolve trade issues with China, and

Washington and Pyongyang failed to reach an agreement.

U.S. President Donald Trump said he had walked away from a

nuclear deal at a summit in Hanoi with North Korean leader Kim

Jong Un because of unacceptable North Korean demands to lift

punishing U.S.-led sanctions.

Vietnam stocks were the worst hit, ending 2.5 percent

lower as financial and consumer stocks led the decline.

No agreement between Washington and Pyongyang was "part of

the reason and an excuse to sell", said a Hanoi-based trader,

adding that the market had slowed in the past few days after

gaining sharply since the Lunar New Year break.

Vingroup JSC, the country's largest listed firm,

closed down 2.9 percent and Vietnam Dairy Products JSC

dropped 4.5 percent.

Despite posting its worst session in nearly 5 months on

Thursday, the Vietnam benchmark stock index rose 6 percent for

the month, making it the top gainer in Southeast Asia.

A contraction in China factory activity in February and U.S.

Trade Representative Robert Lighthizer's cautious comments about

the prospect of a trade deal with China - the region's largest

trading partner - also dampened sentiment across Asia.

Philippine stocks fell 2.3 percent with all sectors

in the red. Real estate firm Ayala Land Inc fell 1.5

percent, while lender BDO Unibank Inc declined 4.4

percent.

Philippine shares lost about 3.8 percent in February, making

them the biggest losers in Southeast Asia.

A dip in financial and material stocks pulled Indonesian

shares down by 1.3 percent.

Indonesia's central bank governor said interest rates could

be lower if stability in the financial system was maintained.

Bank of Indonesia kept rates on hold last week, but said it was

looking at ways to boost loan growth by easing liquidity rules.

Singapore shares fell 1.2 percent with index

heavyweight Jardine Matheson Holdings Ltd ending 3.8

percent lower ahead of its annual results, while Jardine

Strategic Holdings Ltd lost 1.9 percent.

Thai stocks shed 0.7 percent after data showed trade

surplus in Southeast Asia's second-largest economy narrowed in

January.

The central bank governor said that the economy was expected

to slow in the first quarter due to increased external

uncertainty, but will still be on track to hit the full-year

growth target.

SOUTHEAST ASIAN STOCKS

STOCK MARKETS

Change on the day

Market Current Previous close Pct Move

Singapore 3212.69 3250.02 -1.15

Bangkok 1653.48 1665.27 -0.71

Manila 7705.49 7889.12 -2.33

Jakarta 6443.348 6525.683 -1.26

Kuala Lumpur 1707.73 1713.45 -0.33

Ho Chi Minh 965.47 990.27 -2.50

Change on year

Market Current End 2018 Pct Move

Singapore 3212.69 3068.76 4.69

Bangkok 1653.48 1563.88 5.73

Manila 7705.49 7466.02 3.21

Jakarta 6443.348 6194.498 4.02

Kuala Lumpur 1707.73 1690.58 1.01

Ho Chi Minh 965.47 892.54 8.17

(Reporting by Shriya Ramakrishnan in Bengaluru, Additional

reporting by Mai Nguyen; Editing by Subhranshu Sahu)