SE Asia Stocks -Thai shares fall for 6th day; eyes on govt formation

BANGKOK, Aug 1 (Reuters) - Stocks in Thailand fell for a

sixth straight session on Friday as a strong sell-off in global

stocks dented sentiment, but optimism over the domestic economy

lifted banking and consumer stocks.

Investors await the formation of an interim government later

this month after Thailand on Thursday set up an interim

legislature which will appoint a prime minister to choose a

35-member cabinet.

"The SET is likely to have a moderate recovery in August

driven by local factors like the setting up of a new government

and possible earnings upgrades from the street to reflect

stronger fundamentals in 2015," broker KGI Securities said.

The key SET index was down 0.6 percent at midday.

It dropped 1.1 percent on Thursday amid foreign outflows and

a weaker baht due to renewed worries about a recession in the

second quarter. However, the Bank of Thailand insisted that

economic activity "likely" picked up in the quarter.

Shares of energy firm PTT fell amid weak global oil

prices. Shares of beverage firms, such as Ichitan Group

and Oishi Group, dropped after a news

report that the revenue department would charge a higher tax on

ready-to-drink green tea.

Shares of Krung Thai Bank, Siam Commercial Bank

and Charoen Pokphand Foods were among the top

percentage gainers on the index.

Singapore's benchmark index lost nearly 1 percent,

reversing from a rally on Thursday. Shares in United Overseas

Bank Ltd dropped 4 percent after it said its bad debt

charges had doubled in the previous quarter.

Malaysia hovered around its lowest since June 10,

and the Philippines traded in negative territory while

Vietnam was nearly unchanged. MSCI's broadest index of

Asia-Pacific shares outside Japan fell 1.1

percent.

Indonesian markets have been shut all week and will reopen

on Monday.

The U.S. S&P500 stock index posted its worst daily fall

since April and its first monthly drop since January on

Thursday, as economic data sparked concern the Federal Reserve

could raise interest rates sooner than some have

expected.

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SOUTHEAST ASIAN STOCK MARKETS

Change at 0537 GMT

Market Current Prev Close Pct Move

TR SE Asia Index* 435.91 440.11 -0.95

Singapore 3345.91 3374.06 -0.83

Kuala Lumpur 1863.82 1871.36 -0.40

Bangkok 1492.96 1502.39 -0.63

Manila 6860.70 6864.82 -0.06

Ho Chi Minh 596.21 596.07 +0.02

* 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 Sunil Nair)