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Asian stocks, currencies downbeat as virus worries linger

Asian equity and currency markets were broadly weaker on Wednesday, as worries persisted over the Delta variant’s negative impact on economic growth, with Philippine stocks losing 1.5% to hit an almost eight-week low.

Singapore shares .STI were little changed but the local dollar SGD= weakened 0.2% after tight curbs were re-imposed for one month in the country.

Thailand .SETI and Taiwan equities .TWII dropped 0.3% each, while the Malaysian ringgit MYR=MY, the Indonesian rupiah IDR= and the baht THB=TH eased between 0.2% and 0.4%.

Investors favoured safe-haven assets like the U.S. dollar and Treasuries as most Asian nations remained under lockdowns, curtailing economic activity.

South Korea reported a daily record of 1,784 cases as authorities struggled to rein in outbreaks linked to the highly-contagious Delta variant of the coronavirus. Its shares .KS11 and the won KRW=KFTC slipped 0.4% and 0.2%, respectively.

“With much of the region in lockdowns or semi-lockdowns or just a mess, the recovery will inevitably be slower here until the world gets its vaccination act together,” said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.

Southeast Asia is no longer expected “to be the value-trade of 2021, and its currencies will also underperform in the second-half,” he added.

The Philippines’ stock index .PSI skidded on resuming trade after a holiday, as a slight drop in daily COVID-19 cases was outweighed by slow vaccination pace and lockdowns.

However, the peso PHP= firmed for a second day, raking some benefits from a slump in crude prices as the Philippines’ is a net oil importer. The currency had recorded seven straight weekly declines till July 16, shedding around 6% over the period.

“The peso was ripe for a correction after being oversold,” said Nicholas Mapa, senior economist at ING.

“However, short-term pressure on the peso should remain until overall sentiment improves further as the country has been hit with a spate of not so positive developments of late,” he added.

India’s financial markets .NSEI, INR=IN were shut for a holiday.

** Bank Indonesia expected to stand pat on interest rates on Thursday amid severe COVID-19 outbreak – Reuters poll

** Malaysia’s 10-year benchmark yield was down 7.9 basis points at 3.115%

** Singapore’s 10-year benchmark yield was down 5 basis points at 1.38%

Asia stock indexes and currencies at 0645 GMT
Source: Reuters (Reporting by Anushka Trivedi in Bengaluru; editing by Uttaresh.V)

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