EMERGING MARKETS-Taiwan leads Asian stocks lower, currencies weaken as Fed signals tapering

  • 8/19/2021
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* Taiwan drops nearly 3%, state-owned banks urged to buy stocks * S. Korean stocks hit lowest since April 5 * Singapore benchmark falls over 1%, hits 7-wk low * Indonesian c.bank keeps key rate unchanged at 3.50% By Arundhati Dutta Aug 19 (Reuters) - Taiwanese stocks led emerging Asian equities lower on Thursday with a drop of nearly 3%, while currencies weakened after minutes from the U.S. Federal Reserve"s last meeting showed that tapering of monetary stimulus could start this year. The South Korean won led losses among currencies, as the dollar hit multi-month highs against peers. The minutes from July"s policy meeting showed Fed officials discussed when to taper monthly bond purchases and flagged stimulus easing could start this year if the U.S. economy continued to improve. However, analysts at ING said in a note that a lot has happened since the July meeting, including a strong employment report, doubts over inflation pressures and the resurgence of COVID-19 taking greater hold. "The upcoming key event is next week"s Jackson Hole Conference where Fed officials will gather and reflect and debate the latest news and we will be looking out for his (Fed chief Jerome Powell"s) views on the situation," they said. Taiwanese equities closed at a three-month trough, prompting the finance ministry to urge state-owned banks to buy stocks to soften the tumble. Indonesian shares slumped over 2%, and touched their lowest level in a month, while the rupiah was at its weakest in two weeks. Indonesia"s central bank kept its benchmark interest rate at 3.50%, as expected in a Reuters poll of analysts. South Korean stocks fell nearly 2% and hit their lowest since early April. The benchmark has fallen in the last nine sessions out of 10. Singapore equities touched a seven-week low, while the Singapore dollar was at its weakest in a month against the greenback. Thai stocks were subdued, as a member of the central bank"s monetary policy committee played down the prospect of rate cuts, saying interest rates have become less effective managing Thailand"s flagging economy. The Philippine stock benchmark reversed course and was trading in the green, despite the country slashing its 2021 growth target due to a two-week lockdown of the capital region to contain the spread of the Delta variant of coronavirus. Indian markets were closed for a public holiday. HIGHLIGHTS: **Indonesian 10-year benchmark yields are up 0.3 basis points at 6.325% **Malaysia"s 3-year benchmark yield is up 0.3 basis points at 1.913%​​ **Singapore"s 5-year benchmark yield is up 0.1 basis points at 0.809% Asia stock indexes and currencies at 0703 GMT COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan -0.11 -6.03 <.N2 -1.10 -0.59 25> China EC> Indonesi -0.31 -2.60 <.JK -2.47 -0.20 a SE> Malaysia -0.07 -5.17 <.KL -0.54 -6.78 SE> Philippi -0.24 -4.89 <.PS 0.57 -5.90 nes I> S.Korea 11> Singapor -0.25 -3.15 <.ST -1.20 8.79 e I> Taiwan -0.44 +1.85 <.TW -2.68 11.15 II> Thailand -0.42 -10.3 <.SE 0.03 7.11 6 TI> (Reporting by Arundhati Dutta in Bengaluru Editing by Gareth Jones) Our Standards: The Thomson Reuters Trust Principles.

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