S. Korean won recovers after martial law scare; regional markets inch up
Updates for afternoon trade
S.Korean won rebounds from 2-year lows
Kospi down over 1% on martial law confusion
Asian FX, equities edge higher
By Roushni Nair
Dec 4 (Reuters) - Asian markets broadly rose on Wednesday, with South Korean shares bucking the trend and the won stabilizing after President Yoon Suk Yeol's brief martial law declaration late on Tuesday rattled investor confidence.
The won KRW=KFTC extended gains to add 1% by 0709 GMT, bolstered by suspected central bank intervention and the finance ministry's pledge of "unlimited" liquidity support to markets.
The surprise declaration pushed the local currency to a two-year low against the U.S. dollar overnight, dropping as much as 2% at one point — its steepest single-day decline since early November 2016, making the local unit the worst-performing currency so far this year, down nearly 9%.
Benchmark Kospi index .KS11 fell 2.3% for the day and is one of the biggest decliners among Asia's equity markets this year.
Fears of U.S. tariffs and an unexpected interest rate cut by the Bank of Korea coincided with a 14-month export slump in the country, reflecting growing concerns about trade tensions and weakened U.S. demand, all taking the shine off South Korea's assets.
"We believe outflow pressures will increase and pose an upside risk to USD/KRW, especially as positioning had lightened up recently. Once the dust settles, the policymakers will likely want to step up fiscal, in our view," analysts at Citi said in a note.
Meanwhile, the U.S. dollar index =USD, which measures the greenback against six major counterparts, reversed early gains to inch down 0.1%, with traders weighing the chances of a Federal Reserve interest-rate cut this month. USD/
The Indian rupee INR=IN was largely steady after hitting an all-time low on Tuesday. The rupee hit consecutive record lows, pressured by decelerating economic growth, ongoing foreign investment outflows, and the weakening of regional currencies, particularly the Chinese yuan.
While the yuan CNY=CFXS added 0.3%, it faces mounting depreciation pressure due to U.S. tariff threats and the widening monetary policy gap between the two countries.
Equities in the region were largely steady after tracking record highs from a stellar tech performance on Wall Street in the previous session.
Shares in Indonesia .JKSE extended gains, rising 1.6%, but the benchmark is lagging its peers with barely a 0.5% gain so far this year. Equities in Taiwan .TWII jumped nearly 1%, while those in Singapore .STI and Malaysia .KSLE gained0.5%and 0.4%,respectively.
Bucking the trend, stocks in Thailand .SETI dipped 0.2%.
Investors will keenly await inflation data from the Philippines and Taiwan on Thursday, alongside South Korea's growth figures.
HIGHLIGHTS:
** Thai November headline inflation misses forecast
** China's services activity expansion eases in Nov
Asian stocks and currencies as at 0721 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.43 | -6.10 | .N225 | 0.07 | 17.99 |
China | CNY=CFXS | +0.25 | -2.35 | .SSEC | -0.42 | 13.10 |
India | INR=IN | +0.01 | -1.74 | .NSEI | 0.12 | 12.68 |
Indonesia | IDR= | +0.06 | -3.33 | .JKSE | 1.45 | 0.38 |
Malaysia | MYR= | +0.54 | +3.31 | .KLSE | 0.39 | 10.90 |
Philippines | PHP= | +0.34 | -5.03 | .PSI | -0.06 | 4.34 |
S.Korea | KRW=KFTC | +1.04 | -8.68 | .KS11 | -1.44 | -7.20 |
Singapore | SGD= | +0.05 | -1.85 | .STI | 0.51 | 17.44 |
Taiwan | TWD=TP | +0.36 | -5.20 | .TWII | 0.99 | 29.69 |
Thailand | THB=TH | +0.16 | -0.29 | .SETI | -0.16 | 2.59 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Roushni Nair in Bengaluru; Editing by Rashmi Aich and Eileen Soreng
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