EMERGING MARKETS-Asia stocks mostly higher on positive U.S., China cues

By Shruti Sonal

March 10 (Reuters) – Most emerging Asian shares climbed on Wednesday, taking positive cues from a recovery in U.S. and Chinese equities as falling bond yields eased concerns about surging inflation and the outlook for global economic recovery brightened.

Benchmark indexes for Indonesia .JKSE and Malaysia .KLSE added about 1% each, while Philippine .PSI and Thai .SETI shares gained 0.4%.

U.S. stocks rallied overnight, recouping heavy losses from the previous session as bond yields retreated and investors scooped up battered technology stocks.

Chinese shares also bounced back from their lows in the previous session. The country’s factory gate prices rose at the fastest pace since November 2018 in February, raising hopes for robust growth in the world’s second-largest economy this year.

In a further boost to shares, the OECD said on Tuesday that the global economic outlook has brightened as COVID-19 vaccine rollouts speed up and the United States launches a new stimulus package.

The U.S. House of Representatives voted on Tuesday to advance President Joe Biden’s $1.9 trillion COVID-19 relief bill, clearing the way for the measure to be considered on Wednesday.

However, analysts were wary of treating the recovery in equities as a sign of a bull run in markets.

“There appears to be a degree of concession, rather than bullish conviction, about the breathtaking surge in Nasdaq,” said Masayuki Tsunashima, analyst at Mizuho Bank.

They also kept a close eye on U.S. inflation data to be released later in the day and warned the relief rally fuelled by easing bond yields could be short-lived if the inflation exceeds consensus expectations.

“Amid strong expectations for global reflation and faster U.S. economic recovery, the outlook is likely still skewed towards rising global rates from here,” analysts at DBS Group wrote in a note.

“Considering the expected magnitude of yield increases in 2021, it would be challenging for most Asian bonds, especially lower yielding ones, to eke out positive absolute returns.”

In foreign exchange, most regional currencies weakened as the U.S. dollar rose, clawing back some of the losses sustained overnight.

The Singapore dollar SGD=, Malaysian ringgit MYR= and Philippine peso PHP= dipped about 0.3% each.

However, the Taiwan dollar TWD=TP, among the best performing regional currencies so far this year, gained 0.3%. The currency has gained as the country’s exports surged, driven by global demand for laptops, smartphones and other gadgets to support the work-from-home trend during the pandemic.

The tech powerhouse’s booming exports may lead to impressive economic growth of about 5% this year, the head of the statistics office said.

Highlights:

** Thailand’s 10-year government bond yields are down 5 basis points at 1.75%

** Top gainers on the Jakarta stock index .JKSE include Zebra Nusantara Tbk PT ZBRA.JK, Mahaka Media Tbk PT ABBA.JK, Sentral Mitra Informatika Tbk PT LUCK.JK

Asia stock indexes and currencies at 0414 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.30

-5.10

.N225

0.02

5.80

China

CNY=CFXS

-0.05

+0.25

.SSEC

0.67

-2.63

India

INR=IN

+0.00

+0.20

.NSEI

0.51

8.53

Indonesia

IDR=

+0.07

-2.36

.JKSE

1.04

4.76

Malaysia

MYR=

-0.27

-2.57

.KLSE

0.73

0.58

Philippines

PHP=

-0.33

-1.20

.PSI

0.38

-4.86

S.Korea

KRW=KFTC

-0.14

-4.88

.KS11

-0.31

3.25

Singapore

SGD=

-0.26

-1.95

.STI

-0.94

8.28

Taiwan

TWD=TP

+0.25

+0.58

.TWII

0.48

8.13

Thailand

THB=TH

-0.07

-2.60

.SETI

0.29

7.29

(Reporting by Shruti Sonal in Bengaluru; Editing by Sam Holmes)

(([email protected]; Twitter: @shrutisonal26;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.