By Yi Wei Wong

Southeast Asian stock indexes had a bruising first half, with most posting double-digit losses amid Covid-19 lockdowns and the ensuing economic contractions.

The benchmark index in the region's largest economy, Indonesia, led the first-half declines, dropping 22% to 4905.39. Malaysia fared best, shedding 5.5% to 1500.97.

Investor sentiment soured at the end of January as the coronavirus spread and worsened as countries imposed severe restrictions to contain the pandemic.

Company profits in Thailand, Indonesia, Malaysia and Singapore fell close to 40% in the first quarter, one of the worst performances on record, HSBC said. The bank warned that second-quarter earnings could worsen.

In the financial hub of Singapore, the local benchmark index dropped 20% to 2589.91 in the first half. The Philippines' benchmark shed 21% to 6207.72 and Thailand's index lost 15% to 1339.03.

Malaysia's more-tempered decline was partly due to a lower starting point after a weak performance last year, analysts said. The country's stocks have been supported by relatively low price-to-book values and higher participation among local retail investors, said Danny Wong, chief executive of Areca Capital.

Few sectors were spared from selloffs. Major Singapore banks DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. lost 20% and 18%, respectively, in the first half, while Singapore Telecommunications Ltd. fell 27%.

Indonesian conglomerate Astra International lost 31%.

Airlines especially suffered amid fleet groundings, with Singapore Airlines Ltd. losing 41% and AirAsia Group Bhd. tumbling 49%.

Among the few winners were Malaysian glove makers Top Glove Corp. Bhd. and Hartalega Holdings Bhd., which soared on global demand for protective wear.

The regional losses belie a partial recovery in March as investors bought back into equities markets. Major Southeast Asian stock markets are up around 42% since March 23, although the gain is mostly sentiment-driven while fundamentals remain weak, HSBC said.

The outlook for stock markets in the second half remains cloudy as uncertainty about Covid-19 persists, analysts said.

Credit Suisse said it expects a slow recovery in Singapore in the second half due to the billions of dollars the government has dedicated to stimulus spending and the gradual reopening of the economy.

"However, the earning visibility remains low," it said. 



  Write to Yi Wei Wong at yiwei.wong@wsj.com