"The ultimate problem with this type of Federal Open Market Committee dispersion model is that it's confusing, which means more uncertainty, and uncertainty is going to lead to risk reduction," said Stephen Innes, Asia Pacific market strategist at AxiTrader. Thai shares extended falls into a second session and closed at a three-week low, with energy and telecom stocks accounting for most of the losses.
Weak oil prices pushed state-run energy company PTT PCL 1.1% lower, while telecom services provider Advanced Info Service PCL dropped 2.2%. Indonesian shares fell 0.5% as an interest rate cut by the central bank failed to lift sentiment. Bank Indonesia delivered a widely expected 25 basis point rate cut but warned of its economy taking a hit from the global economic slowdown, and said it expected 2019 growth below the midpoint of 5%-5.4%.
"A slight hawkish future stance of the Fed contributed to the pullback, also market seems unmoved despite a 25 bp rate cut," said Anugerah Zamzami Nasr, an equity research analyst at PT Phillip Sekuritas Indonesia. "We suspect that despite lower inflation and resilient external balance, Indonesian economic growth could be sluggish for the rest of the year and might need other non-monetary stimulus."
Resources and telecom stocks were among the top losers, with heavyweight PT Telekomunikasi Indonesia Tbk dipping 0.9%. Kenanga Group analysts see top-line weakness in the second half for the company as changes in its product pricing are expected to lead to lower average revenue per user. Malaysian shares closed 0.2% lower, dragged by consumer and healthcare stocks. A decline in palm oil prices weighed on companies such as Sime Darby Plantation Bhd and IOI Corp Bhd, while hospital operator IHH Healthcare shed 1.7%.