SINGAPORE: Southeast Asian markets ended lower on Thursday, hit by a hawkish Federal Reserve and weak oil prices, while Singapore shares extended their slide to post their lowest close in a week.

The Federal Reserve raised interest rates on Wednesday for the second time in three months, and said it would begin cutting its holdings of bonds and other securities this year.

However, the Fed’s decision and confidence in continued US economic growth was overshadowed by surprisingly weak data released earlier in the day.

US consumer prices unexpectedly fell on month in May and the annual increase in core CPI slipped to 1.7 percent, the smallest rise since May 2015, after advancing 1.9 percent in April.

“Markets are reacting to the situation and have priced in the rate hike,” said Liu Jinshu, director of research, NRA Capital.

Investor sentiment was also dented by oil prices, which fell to six-week lows under pressure from high global inventories and doubts about OPEC’s ability to implement production cuts.

Singapore shares posted their lowest close in one week, dragged down by the financial sector.

While Oversea-Chinese Banking Corp ended at a one-week closing low, index heavyweights United Overseas Bank Ltd closed 2.2 percent lower and DBS Group Holdings shed 0.9 percent.

Malaysia ended in negative territory after hitting a two-year high earlier in the session.

Vietnam shares ended flat.—Reuters