EMERGING MARKETS – South Korean stocks drop after bank rate hike; most of the others withdraw

0
    * S.Korea lifts interest rates from record low 
    * Malaysian ringgit at its strongest in a month
    * Thai stocks up for fifth straight day

    By Arundhati Dutta
    Aug 26 (Reuters) - South Korean stocks and the won fell on
Thursday after the country's central bank raised policy rates,
while most other equity markets in the region pulled back from a
recent rebound ahead of the U.S. Federal Reserve's symposium
later this week.
    Global central banks have sought to tighten policies to rein
in inflation spikes, with the Bank of Korea becoming the first
major Asian central bank to move away from pandemic-era monetary
settings. Investors are also eyeing Fed chair Jerome Powell's
speech on Friday to get clues about a tapering in U.S. stimulus.
    "Markets might have been too quick to brush off the Fed's
Jackson Hole Symposium on Aug. 27-28 as a non-event, " analysts
at DBS said in a note. 
    Surging COVID-19 cases in the region have also pressured its
equity markets.
    South Korea's stock benchmark fell up to 0.8%, and
the won weakened 0.3% against the dollar. 
    The Bank of Korea raised its policy rate for the first time
in almost three years, even as the country reported highest
daily count of COVID-19 deaths for 2021.

    "This is not a dismissal of (the) Delta risks, but an
acknowledgement of the substantial recovery (accentuated by
exports) thus far, " Mizuho Bank analysts said in a note.
    "While the rate-hike may be incongruous with Delta
outbreaks, it provides a pre-emptive buffer against KRW (Korean
won) and macro-stability risks, and quells worries of extended
leverage." 
    Most of the region's currencies weakened, led by the
Philippine peso's 0.6% fall. 
    But, the Malaysian ringgit was at its strongest in
over five weeks, as the dollar hovered near a one-week low
versus major peers. The country's stock benchmark gained
for a fifth consecutive session.
    The ringgit's move was due to softer dollar and broadly
supported risk sentiment on positive U.S. vaccination news and
on expectations that Jackson Hole may not see a tapering
announcement, Maybank analysts said in a note.
    Thai stocks rose for a fifth straight session. The
country's unemployment rate in the second quarter dipped from a
12-year high in the previous three months.
    The Indonesian index dropped 0.8% after the country
said its budget deficit was 2.04% of the GDP between January to
July this year.
    
    HIGHLIGHTS
    ** Indonesian 10-year benchmark yields are down 7.1 basis
points at 6.173%
    ** Singapore's 10-year benchmark yield is up 2.3 basis
points at 1.424%​​ 
    ** Thailand's 10-year government bond yields are up 2.5
basis points at 1.635%  
   
  Asia stock indexes and currencies                       
 at   0413 GMT                                      
 COUNTRY   FX RIC          FX     FX  INDE  STOCKS  STOCKS
                      DAILY %  YTD %     X   DAILY   YTD %
                                                 %  
 Japan                  +0.05  -6.09  <.N2   0.00    1.02
                                      25>           
 China                               EC>           
 India                  +0.00  -1.59  <.NS    0.04   19.02
                                      EI>           
 Indonesi               -0.16  -2.62  <.JK   -0.86    1.37
 a                                    SE>           
 Malaysia               +0.29  -4.06  <.KL    0.60   -2.95
                                      SE>           
 Philippi               -0.41  -3.86  <.PS    0.27   -4.19
 nes                                  I>            
 S.Korea                             11>           
 Singapor               +0.00  -2.38  <.ST   -0.05    9.21
 e                                    I>            
 Taiwan                 +0.03  +2.02  <.TW   -0.11   15.57
                                      II>           
 Thailand               -0.05  -8.66  <.SE   -0.08   10.34
                                      TI>           
 
 (Reporting by Arundhati Dutta in Bengaluru; editing by
Uttaresh.V)
  
Share.

Comments are closed.