KUALA LUMPUR (Nikkei Markets) -- Malaysia and Singapore shares fell Friday, dragging the benchmarks to weekly losses amid soft Asian markets as investors turned risk averse awaiting outcome of the ongoing U.S.-China trade talks.
The Straits Times Index ended 0.9% lower to close at 3,545.38, while the FBM KLCI dropped 0.5% at 1841.83 due to losses in banking stocks. Both gauges shed about 1.0% this holiday-shortened week.
"Investors are likely to stay cautious as uncertainty about trade relations between U.S. and China will persist in the near term," said Yap Pin Keat, head of portfolio management at Fortress Capital Asset Management. "Going forward, the market is likely to be sensitive to economic data from U.S."
Delegations led by U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He kicked off discussions on the way forward for trade between the world's two largest economies after each imposed a raft of import tariffs worth billions of dollars on other's products.
"Very good conversations" have been taking place in the Chinese capital, Mnuchin was quoted as saying in Friday news reports. Still, analysts doubt prospects of any quick resolution to the current trade spat.
Investors also remained cautious ahead of U.S. nonfarm payroll data for April due later Friday after the Federal Reserve signalled further increase in interest rates a day earlier.
"In Malaysia's perspective, we reckon that trade disputes between both Malaysia's key trading partners will likely hurt external demand," AllianceDBS said in an investor note.
Data out earlier Friday showed Malaysia's March exports rose 2.2% from a year earlier but imports declined 9.6% from a year ago. On a month-on-month basis, exports rose 20.1%, outpacing a 13.8% growth in imports.
The three-month moving average of total exports growth was lower at 5.7% year-on-year in March compared with February's 6.7% rate, showing signs of moderation in the near term, said AllianceDBS.
Malaysia Marine and Heavy Engineering Holdings, a state-run oil rig builder, fell 1.2% after reporting wider net loss of 25.27 million ringgit ($6.42 million) in the first quarter.
Beverage maker Fraser & Neave Holdings declined 2.0% after fiscal second-quarter net profit dropped 13.6% year-on-year. Still, the company's finance chief told reporters that earnings would improve in the fiscal second half to Sep. 30 helped by stabilising input costs.
Puncak Niaga Holdings, a waterworks company, jumped 14.1% after securing a contract worth 489.93 million ringgit.
Profit-taking on banks came after the local lenders took off to a great start this year outperforming regional peers and the STI, said KGI Securities Trading Strategist Nicholas Teo.
"This reversal also comes after DBS and UOB announced earnings and as they begin to trade ex- dividend," he noted.
StarHub, Singapore's No. 2 telecommunications company, dropped 0.9%. The company reported a 14.9% decline in first quarter net profit to S$61.5 million ($46.1 million) due to lower mobile and Pay TV revenues.
Great Eastern Holdings rose 0.2% after the insurer reported a 68% surge in first-quarter net profit to S$152.9 million.
--Alexander Winifred and Joannah Perez
--Nikkei Markets is a real-time financial news service for South East Asia's markets published by Nikkei NewsRise Asia Pte Ltd, a Nikkei and NewsRise joint venture company. Nikkei Markets provides wide companies coverage in the region, including the Nikkei's Asia300 companies.