SE Asia Stocks-Most markets fall; Malaysia slumps over 2 pct

* Malaysia declines most in about 2-1/2 years

* Singapore touches over 5-week closing low

* Philippines extends fall into 6th session

By Karthika Suresh Namboothiri

May 23 (Reuters) - Most Southeast Asian stock markets fell

on Wednesday, with Malaysia declining the most since January

2016, as risk appetite took a hit after U.S. President Donald

Trump tempered optimism over trade talks between the world's top

two economies.

MSCI's Asian stocks outside Japan were down

0.8 percent after U.S. President Donald Trump said he was not

pleased with recent trade talks with Beijing.

"The on-and-off status of U.S.-China trade talks is

affecting sentiment. At some point, traders may just decide to

stay on the sidelines," said Liu Jinshu, director of research,

NRA Capital.

Malaysian shares plunged 2.21 percent to their

lowest close since early January over worries about the size of

debt its previous government had left behind.

Finance Minister Lim Guan Eng said on Tuesday that the

previous government deceived the public and parliament over the

country's financial situation and state fund 1Malaysia

Development Bhd.

This came amid worries that the new government's populist

promises could undermine the country's economic prospects at an

increasingly challenging time.

Foreign stock inflows for 2018 have been wiped out, with the

market posting net outflows of $21.2 million as of May 21,

according to data from OCBC Bank.

Telecom company Axiata Group slumped 12.6 percent

on weak quarterly earnings, while CIMB Group Holdings

fell 6.5 percent.

Singapore shares fell 1.3 percent to their lowest

close in more than five weeks. Index heavyweight Oversea-Chinese

Banking Corp declined 1.8 percent, while DBS Group

dropped 1.5 percent.

Banking stocks traded lower as they are likely to have some

exposure to Hyflux Ltd's debt, said Liu Jinshu.

Water treatment company Hyflux said on Tuesday it filed for

reorganisation of its business after lower electricity prices

hurt its finances.

The city-state's headline consumer price index rose lower

than expected in April from a year earlier.

Philippine shares erased early gains to end 1.1

percent lower, extending falls into a sixth session. Property

operator SM Investments Corp closed 3.5 percent lower.

Meanwhile, Indonesian shares rose 0.7 percent to

their highest close in a week.

Financials and consumer stocks were among the top gainers,

with Astra International and Bank Mandiri

rising 4 percent each.

Vietnam shares fell 2 percent in intraday trading

before recovering to close 0.3 percent higher.

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SOUTHEAST ASIAN STOCK MARKETS

Change on the day

Market Current Previous close Pct Move

Singapore 3496.27 3543.18 -1.32

Bangkok 1753.6 1760.71 -0.40

Manila 7560.47 7646.2 -1.12

Jakarta 5792.001 5751.119 0.71

Kuala Lumpur 1804.25 1845.03 -2.21

Ho Chi Minh 988.94 985.91 0.31

Change on year

Market Current End 2017 Pct Move

Singapore 3496.27 3402.92 2.74

Bangkok 1753.6 1753.71 -0.01

Manila 7560.47 8558.42 -11.66

Jakarta 5792.001 6355.654 -8.87

Kuala Lumpur 1804.25 1796.81 0.41

Ho Chi Minh 988.94 984.24 0.48

(Reporting by Karthika Suresh Namboothiri; Additional reporting

by Binisha H. Ben; Editing by Subhranshu Sahu)