Most Southeast Asian stock markets fell on Monday, with Singapore leading losses, as investors trimmed their exposure in risky assets a day before the key US Federal Reserve policy meeting. A 25 bps cut by the US central bank is all but confirmed, with the market's focus now on cues from Fed chairman Jerome Powell's guidance about the easing cycle. "The improved US GDP data does not change the forecast on that (the 25 bps rate cut), but it does reduce the probability of a potential 50 bps (cut) and the number of rate-cuts for the rest of 2019" said Alfonso Esparza, a senior market analyst at OANDA.

Singapore's main board slipped 0.5% to a near three-week low on weakness in financials. Earlier in the day, Southeast Asia's biggest lender DBS Group Holdings Ltd's second-quarter profit topped expectations. But analysts see a tough road ahead for the city-state's banks due to a recent slowdown in the country's economy and a drop in interest rates. DBS lost 0.9%, whereas rivals Oversea-Chinese Banking Corp Ltd and United Overseas Bank Ltd, which are due to report earnings later this week, shed 0.4% and 0.7%, respectively.

Indonesian shares declined 0.4% to their lowest in over a month, with losses concentrated in the consumer sector. Share prices of local cigarette makers have declined since the launch of US-based e-cigarette brand Juul in Indonesia in early-July. Heavyweight PT Hanjaya Mandala Sampoerna Tbk has dropped 10.2% since July 10.

"We estimate that 3-5% of the cigarette market is at risk of competition from e-cigarettes in the medium term, mainly in the higher-priced mild and white segments" Janni Asman, analyst at Maybank Kim Eng Sekuritas said. Elsewhere, Philippine stocks ended flat, while the Thai stock market was closed for a holiday.

Copyright Reuters, 2019