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Nikkei Markets

Malaysia shares fell most in 4 months on geopolitical woes

Singapore shares also ended lowest in more-than-a-month amid Asian rout

KUALA LUMPUR (Nikkei Markets) -- Malaysia's shares plunged Wednesday with the benchmark index sinking to the lowest in four months, while Singapore shares fell amid Asia-wide rout as geopolitical tension in the Korean peninsula resurfaced to haunt global investors.

The FBM KLCI fell 2.2% to 1804.25 with 26 out of 30 index stocks closing in the red, while the Straits Times Index declined 1.3% to 3496.27, its lowest in more than a month, with 28 out of 30 constituents posting losses. Both Singaporean dollar and Malaysian ringgit weakened against the U.S. dollar.

"We are now coming up to end of May, once we get into summer and trading conditions might get a little thinner because of the summer holidays," said Selena Ling, head of treasury strategy at OCBC Bank in Singapore. "The temptation may be to take some profits off the table."

Investors were spooked after U.S. President Trump cast doubt on a prospects of a summit with North Korea during a meeting with South Korean President Moon Jae-in. That outweighed easing concerns over trade war between U.S. and China after Beijing announced lower import tariffs for most vehicles.

North Korea leader Kim Jong Un is scheduled to meet Trump in Singapore on Jun. 12 but Kim has recently threatened to pull out of the discussion if the U.S. insists on denuclearization of the hermit nation.

On Tuesday, Beijing cut import tariffs for most vehicles to 15% from 25%, while tariffs on car parts were reduced from about 10% to 6% in line with a broader move to ease trade tensions with the U.S.

Investors were also nervous ahead of the release of the U.S. Federal Reserve meeting minutes later in the global day, said IG Asia Market Strategist Jingyi Pan. Markets will be looking out for Fed's outlook on inflation and rates, she said.

In Malaysia, telecom stocks led the index losers. Axiata Group fell more than 12% after the largest Malaysian mobile phone company swung into net loss following a weak showing at its Indian associate. Fixed-line operator Telekom Malaysia meanwhile fell 4.8%.

Timber extraction company Priceworth International slumped 10.2% following news report that the Sabah state government has banned export of logs effective immediately.

Inari Amerton, Malaysia's largest technology company by market cap, advanced 2.3% after reporting a 7.8% increase in fiscal third-quarter net profit.

Car assembler DRB-HICOM rose 16% after Prime Minister Mahathir Mohamad said the government has no plan to buy back national carmaker Proton from the company.

In Singapore, heavyweight banking stocks -- Oversea-Chinese Banking Corp, United Overseas Bank and DBS Group Holdings -- fell more than 1% each. The top three banks in Southeast Asia account for 42% of the index' weighting.

Property counters drifted lower with the FTSE ST Real Estate Holding and Development Index, which tracks the performance of the sector, ending down 1.1%.

Data out earlier Wednesday showed Singapore's inflation in April eased due to smaller increases in the prices of retail items, electricity & gas and services, as well as a steeper fall in the cost of private road transport.

Water treatment company Hyflux called for a suspension of trading in its shares Wednesday after applying to the Singapore High Court for a court-supervised process to reorganize its liabilities and businesses, citing an increasing strain on its finances.

--Alexander Winifred and Joannah Perez

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