Asian currency, stock markets hit by China COVID unrest

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Asian emerging markets came under

selling pressure on Monday, with the South Korean won and

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China’s yuan declining the most, as protests in major Chinese

cities over strict COVID-19 curbs dampened the outlook for the

world’s second-largest economy.

The South Korean won weakened 1.1%, snapping a

three-day winning streak, while the Indonesian rupiah

fell 0.4% for its biggest percentage loss since Nov. 16.

The Singapore and Taiwan dollars gave up

0.2% each, while the Philippine peso slipped marginally.

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Investor sentiment was hit by protests in China, a

manufacturing powerhouse and Southeast Asia’s top trading

partner, which flared for a third day and spread to several

cities in a blow to risk appetite.

Khoon Goh, head of Asia research at Australia and New

Zealand Banking Group, said the protests in China hurt risk

sentiment and stoked uncertainty.

“This will continue to be the main driver for Asian markets

in the near term until we see how the situation evolves.”

Markets are adopting cautious approach due to the “unusual

and rare” nature the protests, and on uncertainty about how the

Chinese government will respond to the unrest, Goh said.

Analysts at Barclays are expecting a sharp drop in China’s

economic growth in 2022 to 3.3% from last year’s 8.1%.

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The Chinese yuan retreated 0.4% at 0423 GMT to

its lowest level since Oct. 11.

Elsewhere, Thailand’s baht added 0.2%, while stocks

lost 0.2%, with investors cautiously awaiting the

country’s central bank decision on interest rates on Wednesday.

The Bank of Thailand will raise interest rates by a modest

quarter-point for a third straight meeting amid fragile

tourism-reliant growth and signs inflation has started to ease,

a Reuters poll of economists found.

Across the region, most stock indexes remained subdued with

equities in South Korea losing 1.1%, China

giving up 1%, and Taiwan slipping 1.1%.

However, stocks in India and the Philippines

tacked on 0.1% and 0.6%, respectively.

The Philippines’ economic growth may ease next year after a

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likely expansion of more than 7% this year as global risks

linger, but it will remain resilient, a top official said on

Sunday.

Separately, South Korea’s central bank and government rolled

out additional support measures for the local credit market,

including a 2.5 trillion won ($1.86 billion) repo operation by

the Bank of Korea to be carried out in December.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields rise 3.6 basis points

to 6.979%

** Top losers on the Singapore STI include

Yangzijiang Shipbuilding (Holdings) and CapitaLand

Investment

** Markets in Malaysia closed for a holiday

Asia stock indexes and currencies

at 0408 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY YTD %

%

Japan +0.30 -17.0 <.n2>

China 2 EC>

India -0.06 -9.06 <.ns ei>

Indonesi -0.41 -9.44 <.jk a se>

Malaysia – -6.95 <.kl se>

Philippi -0.11 -10.1 <.ps nes i>

S.Korea 7 11>

Singapor -0.16 -2.03 <.st e i>

Taiwan -0.20 -10.6 <.tw ii>

Thailand -0.06 -6.82 <.se ti>

(Reporting by Roushni Nair in Bengaluru

Editing by Shri Navaratnam)