EMERGING MARKETS-Asian FX, stocks upbeat in new year on vaccine-led recovery hopes

By Anushka Trivedi

Jan 4 (Reuters) – Currencies of emerging Asian markets began the new year on a firm note, while most stock markets also rose on Monday as investors put their faith in coronavirus vaccines to spur economic recovery.

A flurry of robust manufacturing data across the region that pointed to a stabilisation in economic activity also fuelled risk sentiment, helping the MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS hit an all-time peak.

The greenback .DXY fell during the Asian trading session, buoying the Taiwanese dollar TWD=TP 1.5%, while the Malaysian ringgit MYR=MY and the South Korean won KRW=KFTC advanced 0.6% and 0.3%, respectively.

Regional markets also took heart from the Chinese yuan CNY=CFXS surging 1% to smash past the key 6.5 per dollar mark, with the currency’s gains expected to accelerate further. CNY/

“The weaker U.S. dollar is set to be a prolonged theme in 2021,” said Han Tan, market analyst at FXTM, adding that emerging-market currencies would stay supported in that case, with optimism over vaccine rollouts adding to gains.

Meanwhile, the rupiah IDR= firmed 1.3% to a more than six-month high, where as Indonesian 10-year benchmark yields ID10YT=RR were down about 17.30 basis points at 5.925%. Yields fall when prices rise.

After concerns over the central bank’s autonomy in Jakarta, positive vaccine developments toward the end of 2020 helped the rupiah recoup most of its losses as investors were lured by Indonesia’s high-yielding debt amid a weak dollar.

“The rupiah may continue its outperformance… the global hunt for yields should drive more inflows into its bond markets which would be a major supportive element for the Indonesian currency,” Tan added.

A broadly optimistic tone and a subdued dollar also lifted regional equities, with South Korea’s KOSPI .KS11 touching a record high, meanwhile Indonesia .JKSE, Philippines .PSI and Taiwan .TWII shares all firmed around 1%.

However, the heavyweight glove makers that had benefited during the early months of the pandemic dragged the Malaysian bourse .KLSE and Thai shares .SETI slipped 0.4% as the government mulled more restrictions amid a record rise in coronavirus infections.

HIGHLIGHTS

** The Singapore dollar SGD= notches a near 3-year high after Q4 GDP contracts slightly less than expected

** Top losers on Malaysia Index .KLSE are glove makers Hartalega Holdings Bhd HTHB.KL down 13.7%, Top Glove Corp TPGC.KL down 10.5% & Supermax Corp SUPM.KL down 6.7%

** In the Philippines, top index gainers are San Miguel Corp SMC.PS up 4.6% and Bloomberry Resorts Corp BLOOM.PS up 2.8%

Asia stock indexes and currencies at 0556 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

+0.18

+0.22

.N225

-0.85

-0.85

China

CNY=CFXS

+0.99

+0.99

.SSEC

0.66

0.66

India

INR=IN

+0.22

+0.14

.NSEI

-0.11

0.15

Indonesia

IDR=

+1.26

+1.26

.JKSE

1.00

1.00

Malaysia

MYR=

+0.63

+0.63

.KLSE

-1.63

-1.63

Philippines

PHP=

+0.08

+0.08

.PSI

0.81

0.81

S.Korea

KRW=KFTC

+0.31

+0.30

.KS11

2.37

2.37

Singapore

SGD=

+0.33

+0.27

.STI

0.17

0.17

Taiwan

TWD=TP

+1.49

+1.40

.TWII

1.15

1.15

Thailand

THB=TH

+0.13

+0.20

.SETI

-0.37

-0.37

(Reporting by Anushka Trivedi in Bengaluru; Editing by Shailesh Kuber)

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