Factory activity in Asia's economic giant is expected to have contracted for the third month in a row in February, a Reuters poll showed, adding to evidence of a further slowdown in the economy in the first quarter.

China is Southeast Asia's largest trading partner.

Philippine shares declined 1.2 percent, making them the top losers in Southeast Asia, as investors stayed off making risky bets until index heavyweights SM Prime Holdings and SM Investments Corp release their corporate results.

Markets were hit by "selective selling on heavyweight names", and SM Investments alone accounted for 182 million pesos in net foreign selling, said Fio Dejesus, an equity research analyst with Manila-based RCBC Securities.

Foreign investors sold a net 250.7 million pesos ($4.84 million) worth shares on Wednesday, according to exchange data.

SM Prime Holdings and SM Investments Corp, the country's two biggest listed firms by market value, dipped 1.8 percent and 1.9 percent, respectively.

Indonesian stocks closed 0.2 percent lower, with the material and consumer sectors accounting for most of the losses.

The annual inflation rate in Southeast Asia's largest economy probably cooled for a third month in February, as food and pump prices fell, according to a Reuters poll.

An index of the 45 most liquid stocks in the country closed 0.3 percent lower.

Singapore shares reversed course to close 0.4 percent lower, with all sectors except industrial in negative territory.

"Barring a quick resolution to the U.S.-China trade war, regional manufacturing and trade activities may remain lacklustre," OCBC Bank said in a note, referring to a slowdown in domestic manufacturing that has sullied the island state's economic outlook.

Malaysian shares declined for a second straight session, dragged by consumer and industrial stocks.

Sime Darby Plantation Bhd, the world's biggest oil palm planter by holdings, fell 2.9 percent, while Malaysia Airport Holdings Bhd lost 2.2 percent.

Vietnam stocks rose 0.3 percent, boosted by financial and consumer stocks.

U.S. President Donald Trump met Vietnam President Nguyen Phu Trong in Hanoi on Wednesday, hours before his meeting with North Korean leader Kim Jong Un for their second summit and appreciated the fact that the U.S. trade deficit with the Southeast Asian nation was coming down.

($1 = 51.7850 Philippine pesos)

(Reporting by Shriya Ramakrishnan in Bengaluru; Additional Reporting by Gaurav Dogra; Editing by Subhranshu Sahu)

By Shriya Ramakrishnan