EMERGING MARKETS-Stocks advance, currencies tick higher as investors downplay latest US tariffs
* Jakarta stocks at three-week high * Singapore stocks rise to a new record * Asian currencies recover; ringgit snaps 3-day losing streak * Brazil’s real tumbles 2% on 50% tariff threat By Sameer Manekar July 10 (Reuters) – Stock markets in emerging Asian countries pressed forward on Thursday, led by South Korea, as investors largely shrugged off U.S. President Donald Trump’s latest tariff salvos, betting the most damaging tariff scenarios were unlikely to materialise. An MSCI gauge of emerging Asian equities inched higher, supported by stocks in South Korea and Taiwan, which gained 1% and 0.5%, respectively. A subset of ASEAN stocks also jumped to a one-week high. “Investors shrugged off Trump’s warning that there would be no tariff extension beyond the August 1 deadline as trade rhetoric,” DBS analysts wrote. Market participants will keenly scrutinise headlines from the negotiations between emerging economies and the United States. Eyes are on U.S. Secretary of State Marco Rubio’s first visit to Asia during an ASEAN summit in Kuala Lumpur today. Currencies across the board rebounded as the dollar slipped from its two-week high scaled in the previous session. Analysts believe that while Trump’s tariff letters exerted pressure on currencies, the reaction was much less dramatic than in April. “The U.S. dollar could still get some reprieve against Asian FX, with short USD trade looking somewhat crowded from a positioning perspective,” said Lloyd Chan, senior currency analyst at MUFG. “But ultimately, markets may place more weight on the future path of the Fed Funds rate, which could shape the outlook for the USD.” In the lead was the Philippine peso, firming 0.4% against the U.S. dollar, while Singapore’s dollar, South Korea’s won, and Indonesia’s rupiah inched higher up to 0.3%. Malaysia’s ringgit ticked up to 4.2450 a dollar, snapping three consecutive sessions of losses. The country’s central bank slashed its key interest rate for the first time in five years on Wednesday, citing trade-related risks to growth. “The ringgit will likely face near-term pressure from tariff developments. However, domestic macro resilience and our anticipated resumption of Fed rate cut in September support our outlook for USD/MYR to fall to 4.11 by end-2025,” MUFG’s Chan said. In Latin America, Mexico’s peso edged higher but was a few pips shy of its mid-August 2024 high. Brazil’s real tumbled more than 2% overnight after Trump said he would impose a 50% tariff on all imports from the South American nation. Among Asian equities, Singapore’s benchmark set a record high for the seventh straight session. Strong inflows into industrials, telecom firms, and banks have boosted the index nearly 3% this month, and more than 20% since its early-April dip. Indonesian stocks jumped to a three-week high, marking their fourth positive session in a row, driven by top lenders Bank Central Asia and Bank Rakyat, which rose over 1% and 3%, respectively. Shares in Malaysia dipped for the fourth straight day, slipping to a one-week low, while those in the Philippines ticked lower. HIGHLIGHTS: ** Indonesia’s 10-year benchmark yield at 6.593% ** Singapore’s ST Engineering up ~77% YTD, telecom firm SingTel up 29% YTD ** Philippines plans to negotiate with the U.S. to lower tariffs, envoy to Washington says ** Thai stock market closed for holiday Asia stock indexes and currencies at 0331 GMT COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS % DAILY YTD % % Japan +0.10 +7.53 -0.53 -0.71 China India +0.08 +0.02 0.00 7.75 Indones +0.19 -0.74 0.86 -1.08 ia Malaysi +0.02 +5.20 -0.37 -7.23 a Philipp +0.41 +3.00 0.37 0.00 ines S.Korea Singapo +0.09 +6.75 0.49 7.66 re Taiwan -0.26 +12.17 0.48 -1.74 Thailan +0.17 +5.17 – -20.70 d (Reporting by Sameer Manekar in Bengaluru; Editing by Mrigank Dhaniwala)
