South Korea leads equities sell-off as tech rout worsens
S.Korean shares fall as much as 2%
Shares decline in India, Indonesia and Malaysia
Indonesia's rupiah falls to two-week low
Singapore MAS meeting in focus
By Sameer Manekar
July 25 (Reuters) -Equities in Asian emerging markets were under pressure on Thursday after lacklustre earnings from U.S. tech firms triggered a broad sell-off among regional peers, with South Korean shares and the won hit further by a surprise contraction.
South Korean stocks .KS11 were the biggest losers, diving more than 2%, weighed down by heavyweights Samsung Electronics 005930.KS and SK Hynix 000660.KS, which plunged 2.2% and 7.6% respectively.
Further driving the sell-off was data showing an unexpected shrinking of second-quarter growth in the East Asian economy, which prompted further outflows.
"While today's weaker-than-anticipated out-turn raises the risk of an earlier Bank of Korea (BoK) move, we think other considerations, including a weak currency and rising house prices, will keep the BoK cautious," Krystal Tan, Asia economist with ANZ, wrote in a note.
MSCI's index of Asia emerging markets equities .MIMS00000PUS, among the top 10 constituents of which are Samsung Electronics and SK Hynix, slipped 0.9% to its lowest since mid-June.
The broader MSCI index of international emerging markets equities .MSCIEF also fell to its lowest since mid-June.
Among macroeconomic data awaited on Friday were figures on second-quarter U.S. economic growth and personal consumption expenditures (PCE) - the Fed's favoured measure of inflation - to validate traders' bets of interest rate cuts this year.
Futures now imply a 100% chance of a Federal Reserve easing in September. FEDWATCH
"It remains to be seen whether recent regional (Asian) currency gains will be sustained, with U.S. second quarter growth and core PCE data coming up next," said Lloyd Chan, senior currency analyst at MUFG.
Asian currencies have steadied over the past few sessions as rising bets for two U.S. rate cuts this year warm investor confidence in risk-sensitive emerging market assets.
The Indonesian rupiah IDR= slipped 0.4% to 16,266 per dollar, its lowest in two weeks, with equities .JKSE declining 0.8% for a third successive day of losses.
In Singapore, the dollar SGD= hovered near its prior close, although equities .STI were down 0.8% as financial stocks took a hit ahead of Friday's monetary policy meeting.
Investor focus turns to the year's third quarterly meeting of the Monetary Authority of Singapore that is widely expected to keep policy settings unchanged.
In a note last week, analysts at Barclays said they expected a hawkish statement to rein in inflation expectations.
"The latest monthly Consumer Price Index (CPI) prints continue to suggest underlying inflation pressures are still gradually easing but remain elevated – which likely continues to pose a significant bar for FX policy easing."
Elsewhere, the Thai baht THB=TH edged lower while equities .SETI fell 0.5% to a three-week low. The Malaysian ringgit MYR= and the Indian rupee INR=IN gained slightly, while the Chinese yuan CNY=CFXS strengthened to a one-week high.
Markets in Taiwan .TWII, TWD=TP and the Philippines .PSI, PHP= were closed for a second successive day because of bad weather.
HIGHLIGHTS:
** Philippine central bank suspends forex trading
** Indonesia's 10-year benchmark yield ID10YT=RR at 6.993%
** China central bank surprises by lending again at lower rates
** Yen JPY=EBS at 152.410 per dollar, highest since early May
Asia stock indexes and currencies at 0438 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.89 | -7.51 | .N225 | -2.79 | 13.74 |
China | CNY=CFXS | +0.08 | -2.21 | .SSEC | -0.42 | -2.87 |
India | INR=IN | +0.01 | -0.59 | .NSEI | -0.60 | 11.66 |
Indonesia | IDR= | -0.34 | -5.35 | .JKSE | -0.56 | -0.70 |
Malaysia | MYR= | +0.07 | -1.66 | .KLSE | -0.27 | 11.14 |
Philippines | PHP= | - | -5.45 | .PSI | - | 3.53 |
S.Korea | KRW=KFTC | -0.47 | -7.10 | .KS11 | -1.37 | 2.47 |
Singapore | SGD= | -0.03 | -1.84 | .STI | -0.77 | 5.98 |
Taiwan | TWD=TP | - | -6.40 | .TWII | - | 27.56 |
Thailand | THB=TH | -0.19 | -5.43 | .SETI | -0.57 | -8.84 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Sameer Manekar in Bengaluru
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