* U.S.-China Phase 1 trade deal to be signed later on Wednesday * Indonesia trade deficit in Dec likely narrowed - Reuters poll * Malaysia extends losses into fourth session By Sameer Manekar Jan 15 (Reuters) - Southeast Asian stock markets dropped on Wednesday as broader confidence was dented ahead of the signing of an initial Sino-U.S. trade deal following comments from Washington that tariffs on Chinese goods would remain in place for now. U.S. Treasury Secretary Steven Mnuchin said on Tuesday that the United States would maintain tariffs on Chinese goods until the completion of a second phase of a U.S.-China trade agreement. U.S. President Donald Trump is slated to sign the Phase 1 trade agreement with Chinese Vice Premier Liu He at the White House later in the day. "The limited nature of this (Phase 1) deal begs the question of prospects for further progress on lowering trade barriers. And reports that no further tariff reductions are likely until after November's U.S. Presidential elections sets the stage for "morning after" disappointment," Mizuho Bank said in a note. Signs of goodwill came from both sides as the U.S. Treasury Department dropped its designation of China as a currency manipulator on Monday, while Beijing pledged to ramp up its buys from the United States as part of the trade truce, according to a source. In Southeast Asia, the Philippine bourse dropped the most as a volcanic eruption continued to darken the mood. Investors are uncertain regarding the Taal volcano eruption and its impact on the country's gross domestic product, since there is no exact prediction as to when the volcano might erupt, Rachelle Cruz, analyst at AP Securities said. Financial and consumer firms were the top drags, with Bank of the Philippine Islands and SM Investments Corp losing 1.8% and 1.1%, respectively. Singapore's benchmark index slipped 0.4%, with Jardine Strategic Holdings and Wilmar International dropping 1.5% and 2.3%. Malaysian equities extended losses into a fourth session, with Sime Darby Plantation and Digi.Com Bhd slipping 0.8% and 0.9%, respectively. Palm oil futures in Malaysia fell by their most in eight months on Tuesday. India, world's largest buyer of edible oils, has halted palm oil imports from Malaysia, the second-largest global producer of palm oil. Indonesian shares were set to snap four sessions of gains, with Telekomunikasi Indonesia and United Tractors losing 0.8% and 2.8%, respectively. Trade deficit in Southeast Asia's largest economy is likely to have narrowed in December, while exports are expected to have shrunk 3.03% on-year in the month, a Reuters poll showed. Thai stocks were also poised to snap a four-session winning streak. For Asian Companies click; SOUTHEAST ASIAN STOCK MARKETS 0400 GMT Market Current Previous close Pct Move Singapore 3257.96 3270.54 -0.38 Bangkok 1586.05 1586.9 -0.05 Manila 7735.14 7793.25 -0.75 Jakarta 6318.242 6325.406 -0.11 Kuala Lumpur 1576.41 1580.6 -0.27 Ho Chi Minh 966.63 967 -0.04 Change so far in 2020 Market Current End 2019 Pct Move Singapore 3257.96 3222.83 1.09 Bangkok 1586.05 1579.84 0.39 Manila 7735.14 7,815.26 -1.03 Jakarta 6318.242 6,299.54 0.30 Kuala Lumpur 1576.41 1588.76 -0.78 Ho Chi Minh 966.63 960.99 0.59 (Reporting by Sameer Manekar in Bengaluru, Editing by Sherry Jacob-Phillips)
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