June 5 (Reuters) - Asian stocks declined in May as political uncertainties in Italy added to the woes of regional markets, already hit by a surge in the dollar and concerns about U.S. protectionist trade policies.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2 percent in the last month.
However, the index is up nearly 2 percent since the start of June as Italy’s anti-establishment parties formed a coalition government at the end of last week, helping to avert potentially destabilising snap elections that could have turned into a referendum on the country’s membership of the European Union.
Vietnamese stocks, which hit a record high in April, were the biggest losers in the region in May as foreign interest waned. Overseas investors sold Vietnamese equities in 19 out of 22 sessions in May, according to exchange data.
Malaysian shares fell nearly 7 percent as a widening corruption probe linked to the previous government and continued capital outflows soured investor sentiment.
A heavy sell-off in emerging markets last month saw foreigners dump a combined $12.3 billion of bonds and stocks, figures from the Institute of International Finance showed on Tuesday.
New Zealand, India and Vietnam stocks have the highest price-earnings ratio based on 12-month forward earnings in the region, according to Thomson Reuters Eikon data.
Reporting by Gaurav Dogra and Patturaja Murugaboopathy; Editing by Jacqueline Wong