Philippines leads Asian stocks higher; FX subdued as rates in focus
* Dollar ticks up after a three-session slide
* Asian stocks tail rally on Wall Street
By Riya Sharma
May 18 (Reuters) - Most Asian currencies were largely subdued on Wednesday, as the dollar recovered slightly and a hardened inflation stance by the U.S. Federal Reserve chief piled pressure, while Philippines led the rally among equities.
Shares in Indonesia .JKSE and Taiwan .TWII edged up 1.5% each. South Korea's won KRW=KFTC firmed 0.7%, while most other currencies in the region remained muted.
Philippine central bank's accommodative monetary policy has narrowed and it stands ready to make adjustments should it see any sign of inflation expectations becoming disanchored, its governor said ahead of the monetary authorities' policy meeting on Thursday.
Manila shares .PSI jumped 2% to a near two-week high, while the Philippine peso PHP= was little changed, as markets were already expecting a 25 basis point raise in reverse repurchase facility rate PHCBIR=ECI by Bangko Sentral ng Pilipinas (BSP), according to most economists in a Reuters poll.
The Fed said it will "keep pushing" to tighten U.S. monetary policy until it is clear inflation is receding, adding to fears that the central bank might take a more hawkish approach.
"The U.S. dollar being strong, it's never a good thing for stocks or currencies in emerging markets because a lot of the debt is obviously denominated in the U.S.," said Junvum Kim, a sales trader at Saxo Capital Markets.
The greenback =USD edged higher after a three-session slide, reducing riskier assets' appeal.
Asian markets took the lead from Wall Street's risk-on sentiment, along with some improved sentiment for Chinese tech, IG market strategist Yeap Jun Rong said.
Chinese Vice-Premier Liu He's soothing comments to tech executives on Tuesday, saying the government supported the development of the sector and public listings for technology companies, also lifted sentiment across boards.
"Tencent's results will be closely watched today, coming after JD earnings outperformance overnight, which displayed some resilience to COVID-19 lockdowns (in China)," Jun Rong said.
Emerging Asian bonds saw foreign outflows for a second straight month in April, due to higher U.S. yields and concerns over strict coronavirus lockdowns in China.
"There isn't a lot of offshore capital flowing into (emerging) markets and much of what we are seeing in today's stock rally has to do with relief rally recovering from previous weeks. Whatever money was already in the domestic market, is just being flown into it again," Kim said.
The Indonesian rupiah IDR= , which has fallen nearly 1.3% since crude palm oil shipments were halted on April 29, was down 0.3% to hit its lowest since Nov. 2, 2020.
Shares in Jakarta .JKSE were up 2.2% in tandem, with global equity moves. HIGHLIGHTS: ** U.S. retail sales, which grew strongly in April as consumers bought more motor vehicles amid an improvement in supply and increased spending at restaurants, worked as a catalyst to build on a relief rally globally on Wednesday. ** Top gainers on the Jakarta stock index .JKSE include Red Planet Indonesia Tbk PT PSKT.JK up 30.19%, Bank JTrust Indonesia Tbk PT BCIC.JK up 26.03% and Tigaraksa Satria Tbk PT TGKA.JK up 19.75%
Asia stock indexes and currencies
at 0808 GMT
COUNTRY FX RIC
FX INDE STOCKS STOCKS
DAILY % YTD %
X DAILY YTD %
+0.06 -11.0 <.N2 0.94 -6.53
-0.19 -5.85 <.SS -0.25 -15.22
+0.01 -4.16 <.NS -0.06 -6.37
-0.27 -2.96 <.JK
-0.13 -5.22 <.KL
-0.13 -2.78 <.PS
2.02 -5.55 nes
+0.66 -6.14 <.KS
-0.09 -2.66 <.ST
+0.07 -6.80 <.TW
-0.32 -3.58 <.SE -0.09 -2.69
Graphic: World FX rates Link
Asian stock markets Link
Reporting by Riya Sharma in Bengaluru; Editing by Rashmi Aich
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.