Currencies

Asian stocks climb, currencies steady on uncertain rate-cut timeline

EMERGING MARKETS-Asian stocks climb, currencies steady on uncertain rate-cut timeline

Singapore stocks lead gains in EM Asia

Philippine stocks down 0.7%

US Core PCE due on Friday

By Poonam Behura

March 26 (Reuters)Most equities in emerging Asia rose on Tuesday with shares in Singapore clocking solid gains, while currencies traded largely steady after U.S. Federal Reserve policymakers signalled three rate cuts this year although the timing remained uncertain.

Singapore’s benchmark .STI, one of the worst-performing index in the region so far this year, advanced 0.9% with banking stocks among the top boosts in the index. DBS Group DBSM.SI, Southeast Asia’s biggest bank by assets, jumped up to 1.4% to highest level since February 2022.

South Korea’s benchmark index .KS11 surged 0.8% to their highest level since February 2022, while shares in Taiwan .TWII fell 0.6%.

Philippine stocks .PSI dipped 0.7% to a two-week low. The country, one of Asia’s most active issuers of sovereign debt, announced plans to raise as much as 585 billion Philippine pesos ($10.4 billion) from treasury bills and bonds in the second quarter

New quarterly economic projections showed nine of the Federal Reserve’s 19 policymakers see three quarter-point rate cuts this year.

Investors, however, are worried that the key U.S. inflation gauge – core personal consumption expenditure (PCE) price index – due on Friday could derail the outlook for lower U.S. rates.

“The core PCE is probably the most important US data this week which will determine upcoming Fed rate decision,” Poon Panichpibool, market strategist at Krung Thai Bank said.

In currency markets, the South Korean won KRW=KFTC edged up 0.1%. The Taiwanese dollar TWD=TP and Thai baht THB=TH slipped 0.2% and 0.1%, respectively.

China’s yuan CNY=CFXS fell 0.1% to 7.218 per U.S. dollar, above the psychologically important 7.2-per-dollar level.

“I anticipate that USD/CNY could drift back towards the low 7.30s gradually over time. The PBOC needs to accommodate renewed US dollar strength, but it will also continue to lean against volatility and ensure that FX moves are orderly,” said Alvin Tan, who heads Asia FX strategy at RBC Capital Markets.

Elsewhere, the central bank in Sri Lanka surprised markets with a 50 basis points interest rate cut on Tuesday as policymakers prioritised boosting growth and steering the economy out of financial crisis. The Sri Lankan rupee LKR= appreciated 0.3%.

Investors are on the lookout for U.S. consumer confidence and trade figures due out later today.

HIGHLIGHTS:

** China pushes banks to speed approvals of new loans to private developers, say sources

** Fed officials still betting on inflation slowdown, but caution rising

** Japan says it won’t rule out any steps to stem weak yen

Asia stock indexes and currencies at 0425 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

+0.05

-13.36

.N225

15.92

21.46

China

CNY=CFXS

-0.09

-4.41

.SSEC

-0.38

-2.41

India

INR=IN

+0.10

-0.75

.NSEI

-0.27

21.72

Indonesia

IDR=

-0.03

-1.49

.JKSE

-0.40

7.27

Malaysia

MYR=

+0.06

-6.78

.KLSE

0.02

2.83

Philippines

PHP=

-0.09

-1.14

.PSI

-0.67

3.67

S.Korea

KRW=KFTC

+0.08

-5.70

.KS11

0.77

23.35

Singapore

SGD=

+0.07

-0.36

.STI

0.85

-0.80

Taiwan

TWD=TP

-0.20

-3.83

.TWII

-0.57

42.01

Thailand

THB=TH

-0.12

-4.91

.SETI

-0.05

-17.79

Reporting by Poonam Behura in Bengaluru; Editing by Michael Perry

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