* Graphic: World FX rates tmsnrt.rs/2egbfVh
* Graphic: Foreign flows into Asian stocks tmsnrt.rs/3f2vwbA
* Taiwan stocks post biggest drop since March 19, 2020
* Taiwan dollar retreats from near 24-year high
* Virus-led curbs in Malaysia, Philippines, Indonesia weigh
By Rashmi Ashok
May 11 (Reuters) - Tech-heavy equities in Taiwan and South
Korea led losses in Asian markets on Tuesday, as investors were
concerned over a potential spike in inflation, while rising
COVID-19 cases and curbs in other parts of the region further
dampened sentiment.
U.S. stocks toppled off record highs overnight as traders
fretted that strong demand amid tight supply of basic materials
could sharply accelerate consumer prices, with markets now on
edge ahead of U.S. inflation data due later on Wednesday.
A spike in inflation could force the U.S. Federal Reserve to
raise interest rates sooner than planned, which could put Asia"s
central banks in a tough spot, as a resurgence in COVID-19 cases
and lockdowns make it more difficult for lenders to play
catch-up.
Shares in Taipei ended 3.8% lower in their worst
session since March 19, 2020, as heavyweight chipmakers fell.
The Taiwan dollar, heavily reliant on exports, weakened
0.4% to pull back from a near 24-year high scaled in the
previous session.
Equities in Seoul closed 1.2% lower, with the won
weakened 0.5%.
In other parts of Asia, raging COVID-19 outbreaks continued
to drag on markets, outweighing economic prints showing signs of
recovery in the first quarter.
"A large portion of the ASEAN recovery rests on how the next
two weeks play out across the region with the COVID-19," said
Jeffrey Halley, market analyst at OANDA, noting various forms of
restrictions implemented across the region.
Malaysia"s stocks were off 0.7% and the ringgit
weakened 0.2%, after the country imposed a new nationwide
lockdown to halt a third wave of infections, which is putting a
strain on its healthcare system.
Data showed its economy contracted by a
smaller-than-expected margin in the first quarter, supported by
exports.
In Philippines, where partial lockdown measures were
tightened last month, authorities detected its first two cases
of a coronavirus variant initially identified in India, which
some preliminary studies have shown spreads more easily.
Data showed Philippines" gross domestic product fell a
larger-than-expected 4.2% in the March quarter, though
sequential output figures showed a recovery was underway.
The Bangko Sentral ng Pilipinas will hold a monetary policy
meeting on Wednesday, where it is largely expected to keep rates
unchanged at record lows, with comments on the impact of the
latest curbs keenly watched.
Indonesia recently recorded cases of the variant first
detected in India, leading to a ban on the traditional mass
exodus where people visit relatives for the Eid al-Fitr
festival.
HIGHLIGHTS:
** Top losers on FTSE Bursa Malaysia Kl Index
include Genting Malaysia down 3.17% and Genting
down 2.04%
** Top losers on the Jakarta stock index include Pt
Dms Propertindo Tbk and Perdana Bangun Pusaka Tbk PT
, both down 6.99%
** Indonesian 10-year benchmark yields are up 2.5 basis
points at 6.429% while 3-year benchmark yields are up 0.1
basis points at 5.023%
Asia stock indexes and
currencies at 0738 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCK
DAILY YTD % X DAILY S YTD
% % %
Japan -0.11 -5.20 <.N2 -3.08 4.24
25>
China
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