Updated February 13th, 2024 at 13:56 IST
Asian stocks rise, forex remains stable; investors await US inflation data
Chinese markets remain closed for the Lunar New Year holidays, with trading set to resume on Monday.
Asian equities saw a positive uptick on Tuesday, with Malaysian stocks surging to their highest level in over 1-1/2 years, while regional currencies remained relatively steady. Investors are keeping a close watch on the impending US inflation report, which is expected to offer insights into the Federal Reserve's future interest rate decisions.
In Kuala Lumpur, equities rose by as much as 1.4 per cent, reaching their peak since June 2022. Similarly, stocks in Thailand and South Korea advanced by 0.4 per cent and 1 per cent respectively.
Across the region, currencies exhibited modest movements, with the Singapore dollar and Malaysia's ringgit dipping slightly by 0.1 per cent, while the Thai baht saw a 0.4 per cent rise.
The spotlight is on the forthcoming U.S. inflation report for January, anticipated to shed light on the potential timing and magnitude of rate cuts by the Federal Reserve this year. Analysts from Sumitomo Mitsui Banking Corp (SMBC) anticipate limited market impact from the report, suggesting it is unlikely to alter market sentiment on the Fed's anticipated rate cut, projected for May or June.
Meanwhile, in Indonesia, the rupiah experienced marginal losses after initially rising 0.1 per cent, reaching its highest level since January 16. Jakarta stocks, however, fell by 1.3 per cent as Indonesia prepares for simultaneous presidential and legislative elections on Wednesday.
Analysts at SMBC highlighted the significance of the elections, particularly focusing on Defence Minister Prabowo Subianto's performance. If Prabowo fails to secure more than 50 per cent of the votes, a runoff election in June is anticipated, prolonging political uncertainties that could weigh on the rupiah.
In the Philippines, stocks rose by 0.3 per cent and the peso edged up by 0.1 per cent. The Philippine monetary authorities have rescheduled their meeting to Wednesday, with the decision on the benchmark interest rate scheduled for Thursday. Slowing inflation in January suggests a case for earlier interest rate cuts by central banks across the region.
Chinese markets remain closed for the Lunar New Year holidays, with trading set to resume on Monday, Feb. 19. Investors are keenly observing Chinese authorities' actions to support the country's stock market following the appointment of a new markets regulator before the break.
As markets await key economic data and navigate geopolitical events, stability in regional currencies and strategic decisions by central banks continue to influence investor sentiment across Asia.
(With Reuters inputs)
Published February 13th, 2024 at 13:56 IST