SE Asia Stocks-Thai banks rally; large caps underperform in Indonesia

BANGKOK, July 2 (Reuters) - The Thai index rose to its

highest in almost a year on Wednesday, as banking stocks scaled

new highs on optimism about the domestic economy, while

Indonesian shares were rangebound amid a weaker rupiah and

foreign selling in large caps.

Investors looked forward to better business conditions and

an improved loan growth outlook for Thai banks after the central

bank this week signalled the economy would avoid recession this

quarter and said it expected a strong recovery next year.

Large cap banks' shares were among the top 30 by turnover.

Siam Commercial Bank touched a nine-month high and

Kasikornbank climbed to a 13-month peak in active

buying.

Shares of the state-run Krung Thai Bank rose to an

eight-month high. The bank told analysts in a meeting that it

expected a more encouraging outlook for loan demand and credit

quality from the second half onwards, CIMB said in note dated

June 30.

"We share the same view and believe that KTB is more ready

than ever to exploit the positive economic momentum," the broker

said.

Bangkok's key SET index was up 0.3 percent at

1,489.63 at midday, after earlier rising to 1,494.54, its

highest since July 25.

Jakarta's composite index was nearly flat, with

shares of Bank Mandiri and Semen Indonesia

among the losers, while stock exchange data showed foreign

investors were net sellers in stocks.

The rupiah fell on fresh concerns over the

country's current account deficit and uncertainty over the

presidential election next week.

Singapore's property shares, including Hongkong Land

Holdings Ltd, rebounded after a fall on Tuesday due to

weak industry data. The benchmark Straits Times Index

gained 0.5 percent, coming off a near two-month low hit in the

previous session.

Stocks in Malaysia, the Philippines and

Vietnam were slightly higher while Asian stocks rose to a

three-year peak after a round of upbeat global economic data

whetted risk appetites and helped Wall Street taste all-time

highs.

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SOUTHEAST ASIAN STOCK MARKETS

Change at 0630 GMT

Market Current Prev Close Pct Move

TR SE Asia Index* 428.34 427.44 +0.21

Singapore 3259.45 3242.64 +0.52

Kuala Lumpur 1882.02 1879.12 +0.13

Bangkok 1489.63 1485.75 +0.26

Jakarta 4885.00 4884.82 0.00

Manila 6833.24 6826.61 +0.10

Ho Chi Minh 581.26 578.07 +0.55

* 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)