South Korea leads equities sell-off as tech rout worsens
S.Korean shares at lowest since mid-June
Shares decline in India, Indonesia and Malaysia
Rupiah at two-week low; baht down 0.4%
Markets in Taiwan, Philippines closed due to bad weather
Updates as at 0630 GMT
By Sameer Manekar
July 25 (Reuters) -South Korean shares fell to their lowest in six weeks on Thursday, leading declines among broader equities in emerging Asia, after lacklustre earnings from U.S. tech firms triggered a wide sell-off among regional peers.
South Korean stocks .KS11 declined 1.8%, with heavyweight chipmakers Samsung Electronics 005930.KS and SK Hynix 000660.KS sliding 2% and over9%, respectively.
Data showing an unexpected shrinking of South Korea's second-quarter growth also fuelled the sell-off.
"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, which has Samsung Electronics and SK Hynix among its top 10 constituents,slipped 0.8%to its lowest since mid-June.
Although chip-related stocks in South Korea, Japan, and Taiwan have seen massive outflows over the past few sessions following sharp gains through the year, analysts believe the ongoing sell-off might be overdone.
"I think tech weakness is more of a correction than a permanent reversal," said Ben Bennett, Asia-Pacific investment strategist at Legal and General Investment Management.
"I like the structural story still, plus ... South Korea and Taiwan should benefit from lower U.S. yields and a weaker dollar, particularly if it allows local central banks also to cutrates in the coming months."
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 the FederalReserve easing policy inSeptember. FEDWATCH
The Indonesian rupiah IDR= slipped 0.3% to 16,265 per dollar, its lowest in two weeks, with equities .JKSE declining 0.6% in their third successive day of losses.
In Singapore, the dollar SGD= hovered near its prior close, although equities .STI were down 1% as financial stocks took a hit ahead of Friday's monetary policy meeting.
The Monetary Authority of Singapore is widely expected to keep policy settings unchanged.
Elsewhere, the Thai baht THB=TH slipped 0.4%, erasing gains from the prior session, and equities .SETI fell to a three-week low. The Malaysian ringgit MYR= and the Indian rupee INR=IN added a few pips, while the Chinese yuan CNY=CFXS strengthened 0.3% to a six-week high.
Markets in Taiwan .TWII, TWD=TP and the Philippines .PSI, PHP= were closed for a second successive day due to badweather.
HIGHLIGHTS:
** China central bank surprises by lending again at lower rates
** Yen JPY=EBS at highest since early May; Nikkei slumps 3%
** Floods, flightscancelled as Typhoon Gaemi dumps heavy rain on Manila
Asia stock indexes and currencies at 0630 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.76 | -7.63 | .N225 | -3.3 | 13.16 |
China | CNY=CFXS | +0.25 | -2.04 | .SSEC | -0.62 | -3.06 |
India | INR=IN | +0.01 | -0.59 | .NSEI | -0.31 | 11.99 |
Indonesia | IDR= | -0.34 | -5.35 | .JKSE | -0.53 | -0.67 |
Malaysia | MYR= | +0.09 | -1.65 | .KLSE | -0.30 | 11.11 |
Philippines | PHP= | - | -5.45 | .PSI | - | 3.66 |
S.Korea | KRW=KFTC | -0.40 | -7.03 | .KS11 | -1.74 | 2.09 |
Singapore | SGD= | -0.02 | -1.83 | .STI | -1.00 | 5.74 |
Taiwan | TWD=TP | - | -6.40 | .TWII | - | 27.56 |
Thailand | THB=TH | -0.36 | -5.58 | .SETI | -0.41 | -8.70 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Sameer Manekar in Bengaluru; Additional reporting by Ankur Banerjee in Singapore; Editing by Eileen Soreng
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