February 26, 2024

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EMERGING MARKETS-Rising virus deaths hit Indonesian shares; currencies dip

3 min read

By Shriya Ramakrishnan

Jan 22 (Reuters)Indonesian shares fell more than 1% on Friday after the country reported a record jump in COVID-19 deaths for the second time this week, while a steady dollar put a brake on recent rises in Asian currencies.

The record fatalities and sharp rise in daily cases in recent weeks have put Indonesia’s hospitals under serious strain, even as the country began a mass vaccination campaign earlier this month.

Shares in Jakarta .JKSE slipped 1.5%, and the rupiah IDR= dipped 0.2%. The country’s central bank kept key policy rates unchanged on Thursday, but vowed to direct all instruments toward supporting growth.

“The risk is that with more governments in the region (Asia) procuring vaccine deals, the hopes of mass immunisation run ahead of the reality resulting in a pre-emptive move back to pre-COVID normality and a further deterioration in the pandemic situation,” analysts at Mizuho Bank wrote in a note.

Most emerging Asian currencies weakened as the dollar index =USD picked up steam after three days of declines, as optimism about more pandemic relief in the United States under the Biden administration drove up demand for riskier assets.

The South Korean won KRW=KFTC weakened 0.4% against the greenback, and the Malaysian ringgit MYR= and Singapore dollar SGD= each traded 0.2% lower.

Philippine shares .PSI also sank more than 1% on a continued sell-off led by foreign investors, with almost all sectors in the red. The benchmark index was headed for a sixth straight day of losses and a near 3% drop for the week.

“Week-to-date, foreign stock investment declined about $70.86 million.. that is the most in over one month,” said Daniel Dubrovsky, a strategist at trading firm DailyFX.

“I think some of the pessimism had to do with the government’s preference for a Chinese vaccine which has a lower efficacy rate compared to others.”

Stocks in Thailand .SETI shed half a percent and the baht THB=TH gave up 0.2% as the country’s finance minister warned the economy could grow less than earlier forecast this year, following its biggest coronavirus outbreak yet.

Taiwan’s dollar TWD=TP extended its winning streak to a fourth consecutive session, strengthening more than 1% against the dollar.

Taiwan’s central bank said on Thursday it would punish four unnamed foreign banks for helping grains firms speculate in the deliverable forwards foreign exchange market, as it moved to slow the Taiwan dollar’s rise.

The currency’s strength risks making manufacturing exports less competitive. The Taiwan dollar is up nearly 2% this year following a 5.3% gain in 2020.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields are up 1 basis points at 6.301%

** Top losers on the Jakarta stock index .JKSE include Gihon Telekomunikasi Indonesia Tbk PT GHON.JK down 6.99% at 1730 rupiah; Sumber Global Energy Tbk PT SGER.JK down 6.95% at 870 rupiah

** In the Philippines, top index losers are PLDT Inc TEL.PS down 3.14% at 1390 pesos; SM Investments Corp SM.PS down 3% at 1035 pesos

Asia stock indexes and currencies at 0458 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.09

-0.32

.N225

-0.29

4.48

China

CNY=CFXS

-0.13

+0.93

.SSEC

-0.73

3.51

India

INR=IN

-0.04

+0.07

.NSEI

0.05

4.40

Indonesia

IDR=

-0.21

+0.21

.JKSE

-1.50

5.67

Malaysia

MYR=

-0.15

-0.35

.KLSE

0.50

-1.51

Philippines

PHP=

+0.04

-0.10

.PSI

-1.47

-1.47

S.Korea

KRW=KFTC

-0.41

-1.50

.KS11

0.08

10.09

Singapore

SGD=

-0.19

-0.27

.STI

-0.73

5.32

Taiwan

TWD=TP

+1.46

+1.85

.TWII

-0.49

9.11

Thailand

THB=TH

-0.17

-0.03

.SETI

-0.53

3.87

(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Simon Cameron-Moore)

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