Asian stocks rise on Wall Street rally, currencies mixed
Asia’s emerging share markets rose on
Wednesday, buoyed by gains on Wall Street as more companies
reported strong earnings while currencies found relief on the
U.S. dollar’s retreat.
Equities in Indonesia climbed 1.7% and were set for
their best day in nearly two months, followed by Singapore
stocks, which advanced 1.3% to eye its biggest intraday
percentage jump in two months. Stocks in the Philippines
and Malaysia also rose.
Some Asian currencies regained their poise as the U.S.
dollar continued its decline after markets priced in a higher
likelihood of a larger rate hike by the European Central Bank
(ECB) on Thursday.
The South Korean won rose 0.5%, while both the
Singapore dollar and the Malaysian ringgit were
slightly firmer. The Philippines peso and the Thai baht
bucked the trend to fall 0.2% each.
U.S. stocks bounced back sharply on Tuesday as more
companies joined big banks in reporting earnings that beat
forecasts. That offered some respite to investors worried about
higher inflation and the U.S. Federal Reserve’s rate hikes
denting the corporate bottom line.
Netflix Inc predicted that it would return to
customer growth this quarter, after a smaller-than-expected drop
in subscribers in the second quarter.
Investors had reacted positively to corporate earnings and
were encouraged to invest in riskier assets, said Jun Rong Yeap,
markets strategist at IG, adding the market had shrugged off the
cautious take by companies on the economic outlook.
“Other risk catalysts, like the anticipated restart of
Russian gas flows via Nord Stream 1 pipeline and the U.S.
Federal Reserve’s lesser-than-expected rate hike are also aiding
the improved risk appetite,” they added.
Russian gas supply to Europe via the Nord Stream 1 pipeline
was seen restarting on time on Thursday after a scheduled
maintenance, easing concerns about gas supply to Europe.
“So it has been a risk positive night, but recession fears
certainly haven’t gone away and the rebound in equities over the
past week could as much reflect a recovery from over-sold levels
and extreme levels of pessimism,” NAB analyst said in a note.
A Reuters report suggested that the ECB could hike rates by
50 basis points at their meeting on Thursday. The Bank of Japan
and Bank Indonesia, which also meet on Thursday, are expected to
stand pat on interest rates.
In commodities market, oil prices were weighed down by
global central banks’ efforts to tame inflation and ahead of
expected builds in U.S. crude inventories as product demand
** Indonesian 10-year benchmark yields rise by 7.6 basis
points for a fourth consecutive session to 7.492%
** The Bank of Japan is the only major global central bank
to keep an ultra-loose monetary policy
** China kept its benchmark lending rates for corporate and
household loans unchanged
Asia stock indexes and currencies at 0401 GMT
COUNTRY FX FX FX INDEX STOC STOCKS
RIC YTD KS YTD %
Japan +0.07 -16.6 2.40 -4.11
China -0.05 -5.80 0.67 -9.30
India +0.00 -7.01 1.05 -4.85
Indonesia -0.07 -4.90 1.74 4.13
Malaysia +0.02 -6.36 0.48 -8.42
Philippines -0.27 -9.45 0.38 -11.41
S.Korea +0.38 -9.14 0.95 -19.62
Singapore +0.01 -3.04 1.30 1.14
Taiwan +0.05 -7.35 1.05 -18.50
Thailand -0.23 -8.91 0.46 -7.07
(Reporting by Tejaswi Marthi in Bengaluru; Editing by