BENGALURU: Stocks in emerging Asian markets edged lower on Thursday, with South Korean shares impacted by weak economic growth, while the Malaysian ringgit hovered near a one-month high following the central bank’s recent decision to stand pat on its rates.
A gauge of emerging Asian equities dipped 0.1%, shedding early gains, as South Korean shares, which account for about 11% of the index, dropped as much as 1.2%.
SK Hynix and Samsung Electronics were the major laggards in the Korean benchmark index, with a 2.7% and 1.1% drop, respectively.
According to data, the east Asian economy barely grew in the fourth quarter of 2024, missing market expectations, as the country’s worst political crisis in decades hurt an already weakened domestic demand.
The South Korean won was last trading at 1,437.30, a few pips off its five-week high touched on Wednesday. Analysts at Maybank highlighted “plenty of concerns” for the won despite its recent strength.
Besides the political uncertainty, “there also remains risks that the BOK (Bank of Korea) could cut rates in the coming months given the economic concerns,” they said.
Stocks in China jumped after Beijing announced fresh measures to bolster its flagging stock market. The CSI300 blue-chip index and the Shanghai Composite Index advanced as much as 1.8% and 1.9%, respectively, with both indexes hitting their highest levels since early January.
China makes up more than one-third of the MSCI’s index of emerging Asian equities. The dollar index was flat at 108.28, after tumbling from 109.34 on Monday – the steepest one-day slide since November 2023 – as Trump’s first day in office brought a barrage of executive orders though none on tariffs. However, he did threaten more tariffs on a number of trading partners.
“If he (Trump) follows through with his tariff threat on China, it could put renewed depreciation on Asian currencies,” said Lloyd Chan, a senior currency analyst at MUFG Bank.
The Malaysian ringgit slipped, but continued to hover near a one-month high after its central bank held interest rates steady on Wednesday. Stocks in Kuala Lumpur were down 0.7%.
Stocks in Indonesia and Singapore jumped 0.6% and 0.5%, respectively, with those in Jakarta strengthening for a seventh consecutive session.
Traders are awaiting the Monetary Authority of Singapore’s (MAS) first policy decision of 2025, due on Friday. Singapore’s core inflation rose 1.8% in December from a year earlier. This might lead the MAS to a possible forex policy easing on Friday, analysts at Barclays said in a note.
