February 22, 2024

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EMERGING MARKETS-Asian stocks, currencies drop as virus spike threatens recovery

3 min read
    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3lKhL5I
    * Philippine shares retreat from near nine-month highs
    * S. Korean shares end lower for a second straight day
    * Malaysia's ringgit pressured by drop in oil prices 

    By Shriya Ramakrishnan
    Dec 15 (Reuters) - Stocks and currencies across Asia's
emerging markets slipped on Tuesday as a spike in COVID-19 cases
and restrictions globally took some shine off upbeat factory
output data from the world's second largest economy, China.
    Bourses in the Philippines, Taiwan and
Thailand were down between 0.5% and 1%, as rising
infections in Japan and South Korea, as well as tighter curbs in
New York and London dented risk sentiment.
    Markets across the region did not react much to industrial
output data from China, which grew in line with expectations in
November, expanding for an eighth straight month as an economic
recovery gathered pace.
    "Investors continue to straddle that fence between vaccine
hope and economic reality," said Stephen Innes, chief global
market strategist at trading firm Axi.
    "The year-end playbooks are coming out a bit earlier. It
will effectively be the last week of liquidity this year,
culminating with expiry and rebalances on Friday." 
    Central bank meetings in Indonesia and the Philippines will
be in focus in what is likely to be the last action-packed week
of the year for emerging Asian markets.
    Analysts at ING expect both the banks to keep rates on hold
and adopt a wait-and-see approach for recovery to gain traction
after aggressive policy easing this year.
    South Korean shares fell 0.2% and the won
dipped, as the country reported another jump in new COVID-19
cases on Monday.
    South Korea's prime minister pleaded with residents on
Tuesday to abide by social distancing rules to avoid bigger
    Stocks in Bangkok shed about 0.5%, as the financial
ministry said Thailand's economy could grow less than a forecast
of 4.5% next year.
    In currency markets, the Malaysian ringgit weakened
0.3% as crude prices fell due to concerns about a slow recovery
in fuel demand and a flare-up in tensions in the Middle East.
Malaysia is a net exporter of oil.
    While equity and bond inflows have lifted Asian currencies
from pandemic lows in March, excessive strength in currencies of
some export-reliant economies has led to discomfort among
    A Bank of Korea board member on Tuesday expressed the need
to closely monitor rapidly increasing volatility in the foreign
exchange market.
    "There remains room for IDR (Indonesian rupiah) and MYR
(Malaysian ringgit) to catch up in terms of appreciation, given
that the official climate is more welcoming of local currency
strength," analysts at OCBC Bank wrote in a note on Monday.
    ** Thailand's 10-year government bond yields are down 4
basis points at 1.22%
    ** Top losers on Thailand's SETI include Boutique
Newcity PCL down -23.97% at 11.1 baht; Bangkok Post
PCL down 12% at 1.1 baht
    ** In the Philippines, top index losers are International
Container Terminal Services Inc down 3.04% at 121.2
pesos; Megaworld Corp down 2.51% at 3.98 pesos
  Asia stock indexes and                                   
 currencies at   0753 GMT                            
                       DAILY  YTD %               S   YTD %
                           %                  DAILY  
 Japan                 -0.02  +4.38           -0.17   12.81
 China                 -0.03  +6.29           -0.06   10.40
 India                 -0.11  -3.09           -0.14   11.26
 Indonesi              -0.21  -1.56           -0.15   -4.70
 Malaysia              -0.27  +0.66            0.15    4.82
 Philippi              +0.02  +5.45           -0.74   -7.52
 S.Korea               -0.14  +5.77           -0.19   25.44
 Singapor              -0.02  +0.71           -0.30  -11.58
 Taiwan                +1.05  +6.93           -1.00   17.27
 Thailand              -0.02  -0.50           -0.54   -7.07

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Arun
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