* Thai baht up 0.5% * Indonesian rupiah jumps 0.4% * Indonesia stocks at highest since Sept 2022 (Updated at 0703 GMT) By Echha Jain Dec 27 (Reuters) – Most emerging Asian currencies and equities gained on Wednesday, taking cues from a weaker U.S. dollar and a rally on Wall Street on optimism that the U.S. central bank could begin cutting rates as early as next March. MSCI’s emerging market currency index rose 0.2% to touch its highest level since April 2022. MSCI’s emerging market Asia index advanced 0.5%, and was on track to post a yearly gain, snapping a two-year losing streak. Investors continue to bet that major global central banks, led by the Federal Reserve, could begin easing rates next year. The yield advantage that the United States has enjoyed for much of 2023 looks set to erode once the Fed starts cutting rates, said KCM Trade analyst Tim Waterer. “The USD is being shunned by traders and this is allowing emerging market currencies to shine,” Waterer said. Thailand’s baht strengthened 0.5% to its highest since Aug 3. The Indonesian rupiah, one of the best-performing currencies in the region this year, rose 0.4% to a near one-month high, while the Taiwanese dollar strengthened 0.6% to its highest since July 14. Indonesian stocks gained 0.4% to hit their highest level since September 2022, while Taiwanese stocks advanced 0.8% to their highest since March 2022. Earlier this month, the central banks in Indonesia, Taiwan and the Philippines kept their key interest rates unchanged, although they struck a less dovish tone than the Fed. However, an easing inflation trend in the region is likely to provide these central banks with some breathing room in terms of rates. Markets will now be watching closely for South Korea’s industrial output figures and Thailand’s trade data due later in the week. HIGHLIGHTS: ** Indonesian defence minister and presidential candidate Prabowo Subianto cemented his lead in the polls after candidates took part in televised debates ** Hundreds of workers in Indonesia’s nickel industry staged a peaceful rally on Wednesday to demand better standards of work safety, just three days after a fire killed 18, labour groups said, vowing to strike if their demands were not met ** China’s November industrial profits posted double-digit gains as overall manufacturing improved, although soft demand continued to constrain business growth expectations Asia stock indexes and currencies at 0703 GMT COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD % X S S YTD % DAILY % % Japan -0.22 -8.12 <.N2 1.13 29.07 25> China EC> India -0.15 -0.72 <.NS 0.61 19.15 EI> Indones +0.36 +0.91 <.JK 0.40 6.07 ia SE> Malaysi +0.09 -4.97 <.KL 0.15 -2.84 a SE> Philipp -0.72 -0.32 <.PS -0.39 -1.38 ines I> S.Korea 11> Singapo +0.10 +1.35 <.ST 0.95 -2.51 re I> Taiwan +0.57 -0.59 <.TW 0.79 26.55 II> Thailan +0.49 +0.48 <.SE -0.02 -15.3 d TI> 1 (Reporting by Echha Jain in Bengaluru; Editing by Michael Perry and Savio D’Souza)
