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Malaysian shares little changed amid North Korea tensions, lenders boost Singapore

KUALA LUMPUR (Nikkei Markets) -- Malaysian equities ended little changed as rising tensions between the U.S. and North Korea kept investors on edge, while heavyweight lenders helped Singapore shares chalk up their first advance in five sessions.

The Nikkei Asia300 Index of more than 300 regional companies fell 0.9% after North Korea said it was considering plans to fire four intermediate-range missiles to land near the U.S. Pacific territory of Guam. The statement followed U.S. President Donald Trump's warning earlier this week that threats from the isolated state will be met with "fire and fury."

The FTSE Bursa Malaysia KLCI ended almost unchanged at 1,777.77 points. RHB Bank, the nation's fourth-largest lender, led losses with a 1% slide. Genting and Genting Malaysia lost at least 0.7% each. AMMB Holdings snapped a two-day losing streak to end 2.3% higher.

"The market is in a cautious mode, as we see heavy selling in small cap companies today," said Lee Chung Cheng, head of research at JF Apex Securities. "The KLCI is in for a minor correction in the third quarter and may gradually move towards a support of 1,750."

The KLCI advanced more than 10% in the January-March quarter, added 2% in the April-June period, and is up 3% so far in three-months ending September.

Small-cap stocks slumped Thursday. Dagang NeXchange, enterprise data-management solution provider Kronologi Asia, and property company Malton fell more than 4% each.

Petronas Chemicals rose 0.3% following a more than 100% jump in second-quarter net profit. The petrochemical arm of Malaysia's national oil and gas company reported a 24% jump in revenue for the period.

Official data released Thursday showed Malaysia's industrial production rose a better-than-expected 4% in June from a year earlier, driven by all key sectors.

The median forecast in a Nikkei Markets' poll of seven economists was for a 3.3% year-over-year increase. Analysts at ING Asia were expecting a 3% growth, citing a sharp slowdown in trade growth in June.

"Where manufacturing growth goes, GDP growth follows," ING said. Bank Negara Malaysia will release the second-quarter gross domestic product data on Aug. 18.

"We think BNM assesses economic risks almost balanced between growth and inflation and will keep the monetary policy on hold through 2018," ING said.

Singapore's FTSE Straits Times Index added 0.2% to 3,323.24, posting its first advance in five trading days. The city-state's financial markets were closed on Wednesday for a local holiday.

DBS Group Holdings added 1.1%, snapping a four-day losing streak. The lender has been under pressure since releasing June quarter earnings last week, as a lack of widening in sequential net interest margin left some analysts disappointed. DBS also reiterated assets quality concerns.

Raffles Medical Group fell 3%. The stock has lost 12% in August, declining for six out of seven sessions, after reporting a marginal increase in second-quarter profit and revenue on July 31.

Mobile operator StarHub fell 0.8%, its sixth straight loss. The shares have fallen 4.4% since it reported a 21% drop in June quarter profit last week.

Index heavyweight Singapore Telecommunications, which reports earnings on Friday, fell 0.3%, while rival M1 lost 0.6%.

Markets await the city-state's final second-quarter GDP data and retail sales numbers for June, due Friday. Singapore's economy grew 2.5% in the June quarter, according to the government's advance estimates released in July.

"While we expect an upward revision in the 2Q17 GDP figures, the point to note is that the outcome will have strong implications to our full year growth forecast of 2.8%," analysts at DBS Group Research wrote in a note.

--Suzannah Benjamin and Chong Sin Hao

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