Asian stocks climb on US rate-cut bets; currencies tepid
.
Singapore stocks at over two-year peak
Focus on inflation data from Thailand, Philippines, Taiwan
U.S. back on disinflationary path - Fed's Powell
By Roshan Thomas
July 3 (Reuters) -Asian equities rose on Wednesday after comments from Federal Reserve Chair Jerome Powell reignited hopes that the U.S. central bank is likely to begin its easing cycle later this year, while currencies remained subdued amid a steady dollar.
Stocks in Singapore .STI climbed as much as 1.6% to touch their highest levels since April 2022, and Taiwan equities .TWII rose 1.1% after local technology stocks tracked upbeat performances in their U.S. peers.
Seoul shares .KS11 gained 0.5% after the government unveiled tax benefits for companies that raise shareholder returns.
The South Korean government also pledged to support small businesses and the construction sector struggling due to high interest rates in the second half of 2024, as it revised up its forecast for this year's economic growth.
"The uptrend in global equities remains strong, as exemplified in the S&P500 Index hitting a record closing high overnight. This general positive equity sentiment has been rubbing off on most Asian equity indexes," said Alvin Tan, head of Asia FX strategy, RBC Capital Markets.
Shares in Manila .PSI, Kuala Lumpur .KLSE and Bangkok .SETI gained between 0.3% and 0.8%.
Powell said on Tuesday that the U.S. is back on a "disinflationary path", while noting that policymakers require additional data before they contemplate reducing interest rates.
Markets are now pricing in a 67.1% chance of the Fed cutting interest rates in its September meeting, compared with a 54.7%, a month ago, according to the CME FedWatch Tool.
Back in Asia, the South Korean won KRW=KFTC and the Thai baht THB=TH inched 0.2% lower.
China's yuan skidded to a seven-month low against the dollar amid lacklustre economic data and as the central bank nudged the currency's trading range a little bit lower.
China's services activity expanded at the slowest pace in eight months and confidence hit a four-year low in June, data from a private survey showed, reinforcing expectations of further economic stimulus.
Other regional currencies were trading largely flat.
Investors are now awaiting inflation data from Thailand, the Philippines and Taiwan this week. Earlier this week, reports showed that inflation cooled in both South Korea and Indonesia, with Indonesia's June inflation easing more than expected.
Most Asia ex-China central banks were unlikely to cut rates ahead of the Fed, even if inflation cooled further, due to concerns about encouraging FX weakness, RBC Capital's Tan said.
HIGHLIGHTS:
** World Bank cuts 2024 Thai GDP growth outlook to 2.4% on weaker exports
** South Korea President Yoon says headline inflation is stabilising
** Thailand plans more measures to boost growth to 3%, official says
Asia stock indexes and currencies at 0444 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.17 | -12.77 | .N225 | 0.99 | 20.94 |
China | CNY=CFXS | -0.03 | -2.41 | .SSEC | -0.40 | 0.34 |
India | INR=IN | +0.01 | -0.35 | .NSEI | 0.63 | 11.71 |
Indonesia | IDR= | +0.03 | -6.04 | .JKSE | 0.25 | -1.79 |
Malaysia | MYR= | -0.02 | -2.71 | .KLSE | 0.57 | 10.48 |
Philippines | PHP= | +0.04 | -5.76 | .PSI | 0.79 | -0.63 |
S.Korea | KRW=KFTC | -0.22 | -7.34 | .KS11 | 0.53 | 5.29 |
Singapore | SGD= | -0.06 | -2.76 | .STI | 1.32 | 5.31 |
Taiwan | TWD=TP | -0.09 | -5.89 | .TWII | 1.11 | 29.02 |
Thailand | THB=TH | -0.18 | -7.19 | .SETI | 0.26 | -8.75 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Roshan Thomas in Bengaluru; Editing by Sherry Jacob-Phillips
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
