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Equities

Malaysia shares rise, Singapore falls for third straight day

Simmering trade tension clouds outlook as Italy political jitters ebb

KUALA LUMPUR (Nikkei Markets) - Malaysia stocks rose Friday in mixed Asian markets as local investors continued to snap up stocks battered by foreign outflows over the past month. Singapore stocks ended lower for a third session in a row as worries over U.S.-led tariff war hurting global trade mount.

The FBM KLCI ended 0.9% higher at 1,756.38 led by a 5.5% gain in MISC. The Straits Times Index closed marginally lower at 3427.51, dragged by Hutchison Port Holdings Trust's 1.8% loss. The Malaysian ringgit and Singapore dollar held steady against the U.S. dollar

In Malaysia, "Foreign investors have reacted to the uncertainty by selling down their positions," said Vincent Lau, vice-president at broker Rakuten Trade. "Retail investors have been net buyers because of the opportunity to buy cheaper, and this trend is set to continue in the coming month."

Outside Malaysia, investors were more cautious amid fears of a global trade war after Canada, the European Union and Mexico said they would resort to retaliatory measures against the tariffs the U.S. said it will impose on their steel and aluminium products.

Jitters from the simmering trade dispute overcast the latest development in Italy where political tensions eased following a scheduled swearing in of a populist government later Friday.

"Even though we've had some relief from Italian politics, the trade war is now live and escalating and this is having an effect on markets," said Marc Tan, research analyst at KGI Securities in Singapore. "We've had a weak trading month and I think we saw some rebalancing in portfolios and exchange traded funds but negative sentiment remains."

In Singapore, lenders DBS Group Holdings and Oversea-Chinese Banking Corp gave up more ground, losing 0.3% and 0.1% respectively, after edging down a day earlier.

On Thursday, preliminary data from the Monetary Authority of Singapore showed bank lending in Singapore rose 0.8% April from a month ago. Loans through the domestic banking unit in April stood at S$667 billion ($498.2 billion) compared with S$662 billion a month prior.

Changes from MSCI's May semi-annual review of its equity indexes, which take effect Friday, also affected electronics manufacturing services provider Venture Corp, which has been added to the MSCI Singapore Index. The counter closed 0.2% higher.

Pan Asian retailer Dairy Farm International, which will be included in the MSCI Hong Kong Index, climbed 3.9%.

In Malaysia, AMMB Holdings rose 1.7% after the bank told analysts its loan growth had risen 6% in the 2018 fiscal year - outpacing the industry's 4%, helped by demand for mortgage and card financing.

Flour-to-property conglomerate PPB Group fell 0.5%. First-quarter net profit plunged 44% year-on-year, dragged by lower contribution from Wilmar International.

Lion Industries Corp., a steelmaker, rallied 11.4%. Third-quarter net profit rose 24.4% on-year, beating forecasts.

--Alexander Winifred and Joannah Perez

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