EMERGING MARKETS-Philippine stocks fall as rate cut hopes fade, S. Korea index at record
* South Korea stocks mark seventh straight session of gains * Thai shares firm over 1% * Most Asian currencies weaken vs dollar By Anushka Trivedi Jan 5 (Reuters) - Philippine shares slumped 1% on Tuesday as higher-than-expected inflation figures dimmed hopes of an interest rate cut in the near term, while the tech-heavy South Korean bourse scaled a record peak on robust chip export forecast for the year. Manila's index dropped to a one-week low as inflation in December touched a near two-year high and the top end of the central bank's projected range, owing to elevated food prices after weather disturbances damaged crop yields. "The market is responding to the higher-than-expected December inflation print," said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines. The high inflation figure has reduced chances of an interest rate cut further, but the fourth-quarter gross domestic product (GDP) figures expected this month would be key, he added. Meanwhile, Bangko Sentral ng Pilipinas (BSP) played down the risk of surging prices, saying that it intends to keep policy rates low for the next few quarters to support the pandemic-hit economy. The Philippine peso was steady at 48.030 per dollar mark. Trade-reliant South Korea's stocks closed up 1.6%, marking their seventh straight session of gains and the longest buying spree since mid-November. The country forecast a 10% jump in semiconductor exports this year on sustained demand for tech gadgets as the COVID-19 pandemic forces a shift to working remotely. Thai stocks gained 1.4%, with some investors relieved that authorities were holding off on imposing a national lockdown despite rising infections. Most other equity markets in the region were subdued while Asian currencies traded flat-to-lower as investors refrained from making big bets ahead of a crucial Senate election in the United States. The Indonesian rupiah, the Malaysian ringgit and the Thai baht eased 0.1%, while the South Korean won slid 0.5%. A Democratic victory in the elections would hand the party control of the Senate, potentially leading to more tax reforms and fiscal stimulus which would push the long-term U.S. Treasury yields higher, making the dollar more attractive versus emerging currencies, analysts said. HIGHLIGHTS ** The Taiwanese dollar bucked the wider trend with gains of 1.6% ** Indonesian 3-year benchmark yields are up about 7.4 basis points at 5.005% ** In South Korea, chip giants Samsung Electronics and SK Hynix jumped 1.1% and 3.6%, respectively Asia stock indexes and currencies at 0739 GMT COUNTRY FX RIC FX DAILY % FX YTD % INDEX STOCKS DAILY % STOCKS YTD % Japan +0.18 +0.32 -0.37 -1.04 China +0.00 +1.03 0.73 1.60 India -0.12 -0.06 0.12 1.20 Indonesia -0.11 +1.01 0.21 2.32 Malaysia -0.05 +0.35 0.21 -1.31 Philippines -0.03 -0.07 -0.88 -0.08 S.Korea -0.51 -0.13 1.57 4.08 Singapore +0.15 +0.19 -0.14 0.39 Taiwan +1.61 +1.82 0.66 1.82 Thailand -0.07 +0.23 1.36 2.68 (Reporting by Anushka Trivedi in Bengaluru; Editing by Shailesh Kuber)
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