- Currencies tepid against stronger dollar
- South Korea, Shanghai shares rise over 1%
- Singapore keeps monetary policy steady
- Rate decisions from Indonesia, Thailand, Philippines this week
Asian stock markets rose while currencies lost momentum on Monday as investors assessed China’s underwhelming stimulus steps, while focus was on monetary policy decisions by central banks in Indonesia, Thailand and the Philippines this week.
China said on Saturday it will “significantly increase” debt to revive its sputtering economy, but left investors guessing on the overall size of the stimulus package.
“The lack of any announcement on a concrete fiscal stimulus headline figure or major consumption measures is continuing to test investors’ patience,” Maybank analysts said in a note.
The yuan <CNY=CFXS> was trading 0.2% lower, while stocks in Shanghai <.SSEC> rallied 1.7%.
The South Korean won <KRW=KFTC> inched 0.4% lower while the Malaysian ringgit <MYR=> dipped 0.2% as the U.S. dollar extended gains. [FRX/]
In Singapore, stocks <.STI> added 0.5% while the local dollar <SGD=> edged lower after the city-state’s central bank left its monetary settings unchanged, after data showed the economy perked up in the third quarter.
Focus shifts to rate decisions in Indonesia, Thailand and the Philippines, all due on Wednesday, with analysts expecting the Bangko Sentral ng Pilipinas to deliver a 25-basis-point reduction to support economic growth, according to a Reuters poll.
The BSP started its easing cycle in August, and data indicating slower annual inflation in September has given the central bank room to cut rates further.
Analysts at Barclays expect Bank Indonesia (BI) to pause its rate-cutting cycle and stay on hold, noting recent rupiah stability.
BI had surprised markets with a 25 bps cut last month just ahead of the Federal Reserve’s 50 bps cut.
The rupiah had been under pressure earlier this year in response to flitting risk appetite in global markets, although it has since recouped some of the losses and is down just 1% so far this year.
“We expect BI to emphasise the need to defend external stability, while focusing on the USD/IDR level. That said, we acknowledge that this is a close call, and continue to see risk of BI pushing ahead with a 25 bp cut – especially if USD/IDR continues to fall or trade data surprises,” they wrote.
The rupiah <IDR=> was last slightly up at 15,560 per dollar and the peso <PHP=> inched 0.3% lower.
Regional equities were broadly higher, tracking Wall Street gains from last week. Stocks in Seoul <.KS11>, Jakarta <.JKSE> and Manila <.PSI> rose 0.5% to 1%.
Markets in Thailand were closed for a public holiday.
HIGHLIGHTS:
** China launches war games around Taiwan, drawing anger in Taipei, concerns from Washington
** Indonesia’s Prabowo considers corporate tax cut, report says
| Asian stocks and currencies at 0648 GMT | ||||||
| COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
| Japan | <JPY=> | -0.05 | -5.46 | <.N225> | – | 18.35 |
| China | <CNY=CFXS> | -0.18 | +0.26 | <.SSEC> | 1.67 | 9.97 |
| India | <INR=IN> | -0.01 | -1.02 | <.NSEI> | 0.71 | 15.69 |
| Indonesia | <IDR=> | +0.10 | -1.06 | <.JKSE> | 0.51 | 3.94 |
| Malaysia | <MYR=> | -0.19 | +6.94 | <.KLSE> | 0.12 | 12.43 |
| Philippines | <PHP=> | -0.30 | -3.49 | <.PSI> | 0.69 | 14.11 |
| S.Korea | <KRW=KFTC> | -0.34 | -5.01 | <.KS11> | 1.02 | -1.20 |
| Singapore | <SGD=> | -0.08 | +1.02 | <.STI> | 0.53 | 10.88 |
| Taiwan | <TWD=TP> | -0.01 | -4.51 | <.TWII> | 0.32 | 28.13 |
| Thailand | <THB=TH> | – | +3.09 | <.SETI> | – | 3.83 |
— Reporting by Himanshi Akhand in Bengaluru; Editing by Christopher Cushing and Sherry Jacob-Phillips
