SE Asia Stocks-Rangebound, Philippine weak ahead of rate decision

BANGKOK, March 27 (Reuters) - Southeast Asian stock markets

remained rangebound amid weakness in Asian and U.S. stocks while

the Philippine benchmark dropped to a one-month low after a

wider January budget deficit and ahead of the Philippine central

bank's meeting on interest rate policy.

Selling in interest rate-sensitive banking stocks such as

BDO Unibank and Metropolitan Bank & Trust,

with traders staying defensive due to the rate outlook, sent the

key Philippine index down 0.5 percent to 6,318.34.

The central bank is expected to keep its policy rate steady

at a record low of 3.5 percent on Thursday, but hawkish comments

from the governor reinforced views interest rates may be raised

as early as in the second quarter.

For the Philippines budget balance, click

Economists at Daiwa Capital Markets said the Philippine

central bank may normalise policy interest rate, with the risk

of capital flow reversals from the emerging economies likely.

"We expect Bangko Sentral ng Pilipinas (BSP), which has kept

its overnight borrowing rate unchanged at 3.5 percent for the

eleventh straight meeting since September 2012, to begin

normalising its monetary policy by raising policy interest

rates," they wrote in a report dated March 24.

Sentiment in the region was broadly subdued, with stocks in

Singapore, Thailand, Indonesia trading

cautiously higher while Malaysia and Vietnam

hovered in negative territory.

In Jakarta, investors bought shares with favourable dividend

payouts, including shares of Indonesia's Perusahaan Gas Negara

which jumped 2.5 percent on expectations of a 50

percent dividend payout, a trader said.

In Bangkok, the SET index traded a tad higher while cautions

remained over the domestic political situation.

"The SET downside risks are however limited with the

quarterly 'window dressing' and the ex dividends of the big cap

stocks this week," strategists at broker Maybank Kim Eng

Securities.

MSCI's broadest index of Asia-Pacific shares outside Japan

eased 0.1 percent. U.S. stocks fell on Wednesday

as geopolitical concerns rose after the United States and the

European Union agreed to work together on tougher sanctions on

Russia.

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SOUTHEAST ASIAN STOCK MARKETS

Change at 0443 GMT

Market Current Prev Close Pct Move

TR SE Asia Index* 403.48 403.13 +0.09

Singapore 3154.97 3143.32 +0.37

Kuala Lumpur 1839.48 1839.14 +0.02

Bangkok 1361.92 1360.44 +0.11

Jakarta 4747.62 4728.24 +0.41

Manila 6318.34 6348.50 -0.48

Ho Chi Minh 587.16 588.06 -0.15

* The Thomson Reuters South East Asia Index is a

highly representative indicator of stocks listed in Indonesia,

Malaysia, the Philippines, Singapore, Thailand and Vietnam.

(Reporting by Viparat Jantraprap; Editing by Anupama Dwivedi)