By Upasana Singh
Feb 7 (Reuters) – Stocks in emerging Asian markets were mixed on Tuesday, while the Philippine peso hit a more than three-week low as investors assessed the likelihood of further interest rate hikes.
Equities in Kuala Lumpur .KLSE and Singapore .STI retreated 1% and 0.3%, respectively. Meanwhile, Seoul shares .KS11 added 0.5% and stocks in Jakarta .JKSE traded 0.9% higher.
Annual inflation in the Philippines blew past expectations in January to reach a 14-year high on surging food prices, raising the chance that the central bank will deliver a bigger interest rate hike to tame prices when it meets next week.
“We believe Governor (Felipe M.) Medalla will whip out a 50bp (basis point) rate increase in an attempt to get ahead of surging inflation,” said Nicholas Mapa, senior economist with ING.
“Medalla previously sounded off on the possibility of pausing ‘as early as the first quarter’ but today’s inflation report likely means BSP (Bangko Sentral ng Pilipinas) will need to stay hawkish in the near term.”
Stocks in Manila .PSI shed 0.3% on fears of a larger rate-hike, while the peso PHP= slipped 1% to hit its lowest since Jan. 13.
The ringgit MYR=, which has gained 2.4% so far this year, weakened 0.9% to its lowest since Jan. 19. Indonesia’s rupiah IDR= fell 0.6% to hit a more than two-week low.
In contrast, the Thai baht THB=TH rose 0.3%. Singapore’s dollar SGD= and the Indian rupee INR=INeach inched 0.1% higher.
A strong U.S. jobs data raised concerns that the Federal Reserve could keep interest rates higher for longer. Investors now await the Fed chief’s speech at the Economic Club of Washington later in the day for clues on future policy decisions.
“All eyes will be on Fed Chair Jerome Powell’s comments ahead, with the recent strength in the labour market seemingly opening the door for more hawkishness,” said Yeap Jun Rong, a market analyst at IG.
“That said, sticking to his script at the recent Federal Open Market Committee meeting with not too many surprises could see risk sentiments recover, in line with the upward bias presented from the broader trend.”
The dollar index =USD, which hit a near one-month high of 103.76 on Monday, fell 0.1% to 103.45 as of 0540 GMT.
Separately, South Korea unveiled details of a long-touted plan to expand its currency spot and swap markets to offshore players as it strives to lure global investors.
HIGHLIGHTS:
** Malaysia’s industrial production in December rose 3% from a year earlier, slower than expected, government data showed
** Thailand’s exports are likely to grow 1% to 2% this year, unchanged from a previous forecast, due to the slowing global demand
** Indonesia will suspend some palm oil export permits to secure domestic supply amid rising cooking oil prices ahead of the upcoming Islamic festivals
The following table shows rates for Asian currencies against the dollar at 0540 GMT.
COUNTRY
FX RIC
FX DAILY %
FX YTD %
INDEX
STOCKS DAILY %
STOCKS YTD %
Japan
JPY=
+0.29
-0.87
.N225
-0.06
6.06
China
CNY=CFXS
+0.22
+1.71
.SSEC
0.14
4.99
India
INR=IN
+0.08
+0.08
.NSEI
0.02
-1.86
Indonesia
IDR=
-0.63
+2.77
.JKSE
0.87
1.21
Malaysia
MYR=
-0.91
+2.44
.KLSE
-0.97
-1.30
Philippines
PHP=
-1.00
+1.22
.PSI
-0.33
5.29
S.Korea
KRW=KFTC
-0.32
+0.61
.KS11
0.52
9.59
Singapore
SGD=
+0.08
+1.01
.STI
-0.26
3.87
Taiwan
TWD=TP
-0.18
+2.23
.TWII
0.14
9.03
Thailand
THB=TH
+0.31
+2.81
.SETI
-0.14
0.67
(Reporting by Upasana Singh in Bengaluru; Editing by Dhanya Ann Thoppil)
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