Indonesian stocks sag on slowdown worries; most other markets up on trade hopes

(Reuters) - Indonesian shares fell over 1% on Tuesday, extending losses into a fourth session amid fears of an economic slowdown, while most other Southeast Asian markets inched higher after U.S. officials confirmed trade talks with China would start next month.

The benchmark Jakarta stock index <.JKSE> has declined 2.2% in the past four sessions after the central bank warned of its economy taking a hit from the global economic slowdown, and said it expected 2019 growth below the midpoint of 5%-5.4%.

DBS analysts said they expected growth in Southeast Asia's second-biggest economy to soften in the second half, citing recent decline in several key indicators such as cement sales, manufacturing activity and credit growth.

Financial and consumer stocks accounted for most of the losses, with Bank Central Asia Tbk PT dropping 1.3%, while infrastructure developer Astra International Tbk PT slumped 2.3%.

Other markets in the region received a lift from an improved Sino-U.S. trade tone, but gains were capped as downbeat business activity figures from the euro zone, merely two weeks after the European Central Bank announced stimulatory measures, dented sentiment.

"Trade issues are going head to head with central bank stimulus and investors are once again left trying to figure out which play will come out on top," said Nick Twidale, director & co-founder at Xchainge.

Trade war developments are expected to become the centrepiece over the next few sessions, he added.

Singapore stocks <.STI>, among the most exposed to trade tensions, tacked on 0.4% on financials.

Thai and Philippine shares <.PSI> advanced on hopes of rate cuts by their respective central banks this week.

The Thai central bank is set to meet for a policy review on Wednesday, where chances of policy easing were solidified after factory output data for August came in well below expectations, according to analysts at ING.

Meanwhile, Philippine shares snapped a five-day losing streak, driven by property developers such as SM Prime Holdings and Megaworld Corp.

The market is pricing in a rate cut by Bangko Sentral ng Pilipinas on Thursday and hence buying in interest rate-sensitive stocks, said Jeffrey Lucero, an equity analyst at RCBC Securities.

(Reporting by Anushka Trivedi in Bengaluru; Editing by Subhranshu Sahu)

By Anushka Trivedi