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South Korean shares log fifth session of gains
Malaysian ringgit hits highest level in 3 weeks
Fed rate-cut expectations bolster EM assets
By Poonam Behura
Dec 20 (Reuters) –Most emerging Asian stocks and currencies rose on Wednesday, helped by investor confidence about U.S. rate cut prospects next year despite pushback from some policymakers.
Shares in Seoul .KS11 rose about 1.8%, notching their fifth consecutive session of gains. Equities in Bangkok .SETI and Manila .PSI advanced 0.5% each.
Meanwhile, South Korea’s won KRW=KFTC rose 0.7%, snapping a three-day losing streak. The country’s central bank chief, Rhee Chang-yong, said he agrees with the view thatodds of Fed rate cuts were rising, which would offer Korean policymakers a chance to focus on domestic factors.
Malaysia’s ringgit MYR= also added 0.5%, hitting its highest level in around three weeks.
“There are higher inflows in the Asian assets and the rally is explained by the ongoing risk-on sentiment as Fed pivot bets are still on and unfettered,” Vishnu Varathan of Mizuho Bank said.
Emerging assets gained ground, defying recent pushback from Federal Reserve officials, as investors continued to bet on rate cuts next year after Chair Jerome Powell’s unexpected dovish stance last week.
Markets are eyeing theU.S core personal consumption expenditure (PCE) index data due on Friday, which will set expectations for the Fed’s policy stance next year.
Varathan added that potential risks to market confidence include surging oil prices because of an escalation in the Middle Eastern conflict.
“The maritime disruptions in the Red Sea after militant attacks and the war in Gaza could push up freight and oil prices, taking some froth off (the market rally) at some point.”
The surge in oil prices due to the supply disruption poses a fresh risk to inflation and fiscal health of net importers like Thailand and India.
Thailand’s baht THB=TH was last down 0.3%,while the Philippine peso PHP= and the Taiwanese dollar TWD=TP added 0.3% each. The Indian rupee INR=IN was largely unchanged.
Indonesia’s rupiah IDR= was largely unchanged while stocks .JKSE rose 0.6%.Bank Indonesia is set to hold its policy meeting on Thursday, with markets expecting the central bank to keep rates on hold.
Meanwhile China’s central bank kept its benchmark lending rates unchanged at the monthly fixing on Wednesday, in-line with market expectations, amid worries of deflation and slower economic growth.
The Chinese yuan CNY=CFXS declined 0.2%. Shares in Shanghai .SSEC also lost about 0.8%.
HIGHLIGHTS:
** Japan govt to raise long-term rate estimate in FY2024/25 budget –sources
** S.Korea central bank says inflation to reach about 2% by end-2024
** Thailand sticks to minimum wage hike , despite PM push for more
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Asia stock indexes and currencies at 0641 GMT |
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|
COUNTRY |
FX RIC |
FX DAILY % |
FX YTD % |
INDEX |
STOCKS DAILY % |
STOCKS YTD % |
|
Japan |
JPY= |
+0.08 |
-8.76 |
.N225 |
1.37 |
29.05 |
|
China |
CNY=CFXS |
-0.21 |
-3.29 |
.SSEC |
-0.83 |
-5.87 |
|
India |
INR=IN |
+0.04 |
-0.52 |
.NSEI |
0.28 |
18.82 |
|
Indonesia |
IDR= |
-0.12 |
+0.30 |
.JKSE |
0.48 |
5.43 |
|
Malaysia |
MYR= |
+0.52 |
-5.48 |
.KLSE |
0.24 |
-1.75 |
|
Philippines |
PHP= |
+0.34 |
-0.16 |
.PSI |
0.46 |
-0.23 |
|
S.Korea |
KRW=KFTC |
+0.69 |
-2.65 |
.KS11 |
1.78 |
16.90 |
|
Singapore |
SGD= |
-0.02 |
+0.85 |
.STI |
-0.02 |
-4.16 |
|
Taiwan |
TWD=TP |
+0.13 |
-1.95 |
.TWII |
0.33 |
24.74 |
|
Thailand |
THB=TH |
-0.32 |
-0.87 |
.SETI |
0.54 |
-15.96 |
Reporting by Poonam Behura in Bengaluru; Editing by Varun H K
