Most fall on tariff fears, fading hopes of long-term Fed easing

(Reuters) - Most Southeast Asian stock markets ended lower on Wednesday, after positive U.S. retail sales data overnight dampened expectations of long-term policy easing by the U.S. Federal Reserve and fears of fresh U.S. tariffs on Chinese goods.

U.S. President Donald Trump threatened that the U.S. could impose fresh tariffs on Chinese goods and that the two countries still had a "long way to go" in striking out a trade deal.

U.S. retail sales in June increased more than expected, helped by a rise in purchase of motor vehicles, furniture and building materials, among other things.

"While traders see the Federal Reserve interest rate cut this month as a lock, the strength of June data could be enough to dim the hopes for subsequent easing," said Stephen Innes, managing partner at Vanguard Markets Ltd, in a note.

Market participants have benefited over the last year from hopes of dovish action from the Fed, especially when confronted by headwinds from the Sino-U.S. tariff war. The year-long spat between the world's two top economies has caused considerable damage to economic growth worldwide.

Malaysian stocks were down 0.7%, dragged by resource and utility stocks. Petronas Chemical Group lost 3.9%, while electricity generator Tenaga Nasional fell 1.6%.

Indonesian shares <.JKSE> were slightly lower, hurt by losses in telecom and financial stocks.

Indonesia's central bank is widely expected to cut rates on Thursday, according to a Reuters poll, ahead of the anticipated Fed policy easing.

Thai stocks fell, with index heavyweights Bangkok Bank and PTT Exploration and Production down 1% each.

Philippine benchmark <.PSI> ended lower for a second day, hurt by losses in financial and industrial stocks.

Property developer SM Prime holdings fell 1.4%, while International Container Terminal Service was down 1.1%.

Singapore shares <.STI> rose marginally, as the market awaited further direction after disappointing June export data, which followed a contraction in second-quarter GDP.

"The economic data has increasingly favoured easing by the Monetary Authority of Singapore" Prakash Sakpal, an economist at ING group, said in a note.

"Talk of an off-cycle policy adjustment, before the next scheduled semi-annual review in October, has gained traction," he added.

(Reporting by Soumyajit Saha; editing by Gopakumar Warrier)

By Soumyajit Saha