Asian stocks rise on China boost, currencies weaken on virus worries
Most Asian stock markets rose on Monday, with Philippine equities leading gains, tracking a rebound in Chinese shares, while currencies in the region weakened on rising COVID-19 cases.
Philippine stocks .PSI jumped 2.8%, after having lost more than 3% in the previous session, while equities in Taiwan, Japan and China all rose more than 1%.
“It is surprising that Asia-Pacific markets are doing this well given the absence of any major good news over the weekend,” Margaret Yang, a Singapore-based strategist at IG said.
China shares .SSEC advanced as much as about 2% on Monday, as the benchmark index slightly recuperated from a sharp drop last week following a crackdown on the private education sector. .SS
“Investors across the region are likely following participants buying the dip in Chinese stocks… plus the rise in domestic virus cases may leave further room for the PBOC to ease policy going ahead,” Yang added.
China on Monday reported its highest daily rise in coronavirus cases since the start of this year, adding to fears of a surge in infections due to the more virulent Delta variant.
On Saturday, the country had reported a slowdown in factory activity as higher raw material costs, equipment maintenance and extreme weather weighed.
Investors also expect a slowdown in supply chains across Asia as western economies open up and shift back to services consumption, with pent up demand fading.
The Thai baht THB=TH weakened as much as 0.33% in its worst session since July 19 as the country enhanced restrictions and saw protests against the government’s handling of the coronavirus crisis.
Rising COVID-19 cases and stricter curbs also pushed the Malaysian ringgit MYR= and the Philippine Peso PHP= lower.
Indonesia reported an uptick in its inflation rate for July as prices of some food and health products rose.
However, the latest virus wave would delay inflationary pressures to late 2022 and Indonesia’s central bank will not raise benchmark rates till then, Bank Indonesia’s governor said in an interview with Reuters.
Indonesia’s rupiah IDR= strengthened slightly, while Jakarta stocks .JKSE inched higher.