Most Asian equities, currencies firm as Fed taper fears wane
Most Asian emerging stock markets gained on Monday, led by Indonesia, India and Singapore, as U.S. Federal Reserve chief Jerome Powell’s remarks at the Jackson Hole Symposium calmed fears over the tapering timetable.
Among currencies in the region, South Korea’s won and the Malaysian ringgit led the rise while the Indian rupee also logged strong gains, as the dollar nursed losses after Powell laid out on Friday a slower-than-expected path to rate hikes.
The won KRW=KFTC rose as much as 0.6%, while the ringgit MYR= touched a near two-month high. .KS
“Focus shifts to the U.S. employment report, as markets look for evidence of substantial further progress toward maximum employment,” analysts at Barclays said in a note.
Barclays expects U.S. non-farm payrolls, due on Friday, to rise a “healthy” 850,000 jobs in August compared with 943,000 jobs in July.
Equities in Thailand .SETI advanced as much as 1.4% to hit their highest since mid-June, while Singapore shares .STI added up to 0.9%.
India’s Nifty 50 .NSEI hit a record high, advancing more than 1% in its sixth consecutive session of gains, a day ahead of the June-quarter economic growth data.
A Reuters poll showed India’s economic growth likely touched a record high in the quarter through June, reflecting a very weak base last year and a rebound in consumer spending.
“However, large year-on-year growth rates mask the underlying weakness caused by the latest COVID-19 outbreak. Maybe not so much in Australia, but certainly in India, where the second wave of the outbreak spread over most of the second quarter and was far deadlier than the last year,” analysts at ING said in a quote.
The Dutch bank expects India’s economy to have grown 17.1% from last year in the three months ended June 30.
The rupee INR=IN firmed 0.4% to hit its highest since mid-June as the country attracted foreign direct investment inflows of $22.53 billion during the April-June quarter, 90% higher than a year earlier.
Malaysia’s new prime minister unveiled his cabinet last week, retaining the finance minister and others from the previous administration in the hope of restoring political stability as the country faces rising COVID-19 infections.
That supported the ringgit MYR= as well as local equities .KLSE, which extended gains into a seventh session, adding about 1% to hit a four-month high.
Indonesia’s rupiah IDR= firmed as much as 0.3% to a three-week high, while equities .JKSE jumped more than 1%. In Thailand, the baht THB=TH appreciated 0.6% to hit its highest since July 8.
Data showed Thailand’s manufacturing output in July grew 5.12% from last year, but at a slower pace than a Reuters poll forecast of 11% growth.
Markets in the Philippines PHP=.PSI were closed for a holiday.
** Indonesian 10-year benchmark yields fall as much as 3.3 basis points to 6.133%
** Singapore dollar SGD= the outlier in the region, slips about 0.2%
** Bearish bets soften on Asian FX as U.S. dollar eases – Reuters poll
Asia stock indexes and currencies at 0722 GMT
FX DAILY %
FX YTD %
STOCKS DAILY %
STOCKS YTD %
Source: Reuters (Reporting by Sameer Manekar in Bengaluru; Editing by Himani Sarkar and Subhranshu Sahu)