Most Asian FX, stocks gain as China's COVID situation improves
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Most Asian currencies and stocks were
broadly higher on Tuesday, buoyed by optimism over China’s
improving COVID-19 situation, while a weaker dollar and a fall
in U.S. Treasury yields overnight also boosted investor
sentiment.
Equities in Philippines and Indonesia edged
up more than 1% each, while South Korea’s won led
gains among the Asian currencies.
Shares in Thailand climbed 1.6% while the baht
was up nearly 0.6%, after Southeast Asia’s
second-largest economy grew 2.2% in March quarter, beating a
forecast of 2.1% rise.
Other emerging Asian stock markets were higher too,
following an improvement in the fragile global risk appetite as
investors looked past China’s dismal monthly activity data on
Monday, as the world’s second-largest economy’s coronavirus
situation improved.
“Given that Chinese economy weakened significantly in April
due to COVID-19 lockdowns in some parts… with both industrial
production and retail sales coming in weaker than expectation…
China has stepped up its policy supports in the past week,” OCBC
Bank analysts said in a note.
In Indonesia, the world’s top palm oil exporter, hundreds of
smallholder farmers staged a protest in the capital Jakarta and
in other parts of the country, demanding that the government end
a ban on crude palm oil shipments that has slashed their income.
“The ban…it’s more negative on the currency just because
it reduces export performance… it hurts current account
position and that’s probably why we’re seeing some pressure on
the pier as well,” said Mitul Kotecha, senior EM strategist with
TD Securities.
The Indonesian rupiah, which has fallen nearly 1.6%
since crude palm oil shipments were halted on April 29, was down
0.2% to hit its lowest since Nov. 2, 2020.
The country’s trade surplus, however, jumped to its largest
ever at $7.56 billion in April, as exports rose to a record high
while imports grew slower than expected.
In contrast, the dollar slipping from a two-decade high this
week and the plunging Chinese yuan founding a ground, as
investors trimmed bets on whether U.S. interest rate rises will
drive further dollar gains, provided Asian currencies across the
board a much needed respite.
However, the Vietnamese dong hit its lowest since
Jan. 7, 2021.
HIGHLIGHTS:
** Indian share markets were up 2.1%, with all eyes on the
listing of state-run Life Insurance Corp, the country’s biggest
IPO, later in the session
** The Indian rupee weakened to touch a record low of 77.73
versus the dollar, with traders watching domestic equities for
clues to fund flows
** Top gainers on Thailand’s SETI include AQ Estate PCL
up 50%, Indara Insurance PCL up 30%, and
Castle Peak Holdings PCL up 23.58%
Asia stock indexes and
currencies at 0815 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.23 -11.1 <.n2>