logo
Asia FX mixed against soft dollar

Asia FX mixed against soft dollar

BENGALURU: Most emerging Asia stock markets tumbled on Monday, led by Taiwan, Malaysia and South Korea, as underwhelming economic data from China and a downgrade of United States' credit rating dented sentiment.
In Southeast Asia, stocks in Kuala Lumpur fell 1.1% after a mixed bag of economic data from Asia's largest economy, China, pressurised risk appetite.
China has been Malaysia's biggest trade and investment partner for nearly two decades.
Trade-reliant South Korea's benchmark KOSPI fell as much as 1.3%. The country's financial authorities said they were watching domestic and international markets closely, warning that the US downgrade could exacerbate market volatility.
Moody's downgraded the credit rating of the United States on Friday by a notch, citing ballooning debt and interest that it deemed higher than similarly rated sovereigns.
'The downgrade gave investors an excuse to book profit from the stock market near its previous peak,' said Huh Jae-hwan, an analyst at Eugene Investment Securities, referring to the benchmark index in Seoul.
The won was 0.9% higher against the dollar, which dropped 0.4%.
Taiwan also came under pressure, with its shares falling 1.5%. Taiwan Semiconductor Manufacturing Co, the world's largest chipmaker, fell 1.4%, reflecting broader concerns over the prospects of the global technology sector.
Taiwan, a key player in the global semiconductor supply chain, has been increasingly seen by Washington as crucial in its efforts to shift global supply chains away from China, especially for technology and chip companies.
The strategic importance of Taiwanese chip firms was underscored during the pandemic, when supply constraints disrupted the global electronics industry.
Other equity markets in Asia were downbeat, with shares in Thailand, Philippines and Singapore lower by 0.6%, 0.2% and 0.5%, respectively.
Currencies were mixed against a softer US dollar.
The Thai baht led gains among its regional peers, adding 0.6% after first quarter economic growth beat market expectations.
Elsewhere, the Malaysian ringgit extended losses after the domestic central bank trimmed annual economic growth forecasts. The currency was last trading unchanged.
The Indonesian rupiah was steady ahead of a Bank Indonesia meeting later in the week, prefaced by growing expectations of a rate cut.
'While a rate cut could support equities, it may cap any near-term strength in the currency, especially with US yields still elevated and the Federal Reserve in no rush to ease,' said Mohit Mirpuri, an equity fund manager with SGMC Capital.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Asian currencies: Philippine peso and S Korean won down
Asian currencies: Philippine peso and S Korean won down

Business Recorder

time16 hours ago

  • Business Recorder

Asian currencies: Philippine peso and S Korean won down

BENGALURU: Asian stocks took a breather from their rallies on Friday, with equities in Singapore snapping a 14-day winning streak, as investors expressed caution ahead of a key tariff deadline next week and central bank meetings. Next week, the US calendar is packed with President Donald Trump's August 1 trade deadline, a Federal Reserve rate decision, the monthly jobs report and major corporate earnings all on tap. The Bank of Japan will also hold its policy meeting next Thursday. 'It looks like markets are going to take much of a breather going into the weekend and also into the next week, where there can be more trade-related updates as we build up to the 1 Aug deadline,' said analysts at Maybank. Still, equities across the region remained on course for solid weekly gains, buoyed by improved risk sentiment and hopes of more agreements ahead of a key August 1 deadline. Most Southeast Asian bourses rallied over the past two weeks after Vietnam, Indonesia, the Philippines and Japan sealed favourable trade pacts with Washington. The MSCI Emerging Asia equities index dropped 0.7% after reaching its highest level since September 2021 on Thursday. The benchmark is still up over 3% this month and on track for a fourth consecutive month of gains. In Kuala Lumpur, equities fell nearly 1%, paring back a rally that had lifted the index more than 10% since its April lows. Stocks in the Philippines and Indonesia also slipped on the day, though both were set to post weekly gains of between 2% and 3%. Regional currencies softened alongside equities, as the Philippine peso and South Korean won each dropped 0.6%, while the Malaysian ringgit and Indian rupee slipped 0.1% and 0.2%, respectively. Vietnam bucked the trend, with the benchmark index jumping 0.7% to 1,531.1 points — its highest level since January 2022. Vietnamese equities have surged since early July, after the country struck a trade deal with Washington that cut expected tariffs to 20% from a feared 46%. Singapore's FTSE Straits Times Index declined 0.8%, snapping a 14-session winning streak, as investors took profits following a five-week rally driven by industrials, REITs and defensives. The city-state's central bank is set to meet next week, with economists split over whether the Monetary Authority of Singapore will ease policy or hold steady. Analysts at Barclays expect further monetary easing across major emerging Asian central banks, though at a slower, more cautious pace, reflecting 'a greater willingness to wait and see amid the ebb and flow of US trade policy,' they wrote.

Palm snaps three-week rally on profit-taking, output concerns
Palm snaps three-week rally on profit-taking, output concerns

Business Recorder

timea day ago

  • Business Recorder

Palm snaps three-week rally on profit-taking, output concerns

KUALA LUMPUR: Malaysian palm oil futures ended more than 1% lower on Friday, snapping a three-week rally, as traders booked profits and concerns over rising output amid sluggish demand weighed on prices. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid 54 ringgit, or 1.25%, to 4,276 ringgit ($1,013.75) a metric ton at the close. The contract fell 0.9% this week. Crude palm oil prices have dipped after a recent rally due to profit-taking, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari. Signs of a recovery in production amid tepid demand are also contributing to the decline, he added. Malaysia's crude palm oil production is likely to rise to 19.5 million metric tons in 2025 from 19.3 million tons a year earlier, the Malaysian Palm Oil Board said. Cargo surveyors estimated that exports of Malaysian palm oil products for July 1-25 fell between 9.2% and 15.2% from a month earlier. Malaysian palm oil climbs on short-covering 'The market is aware of potential output increases in the third quarter and current demand trends suggest that unless there is a pick up in demand, end stocks could rise above 2.1 million metric tons in July,' Paramalingam said. Dalian's most-active soyoil contract rose 0.39%, while its palm oil contract shed 0.95%. Soyoil prices on the Chicago Board of Trade were down 0.41%. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices were stable, as trade talk optimism supported the outlook for both the global economy and oil demand, balancing news of the potential for more oil supply from Venezuela. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. Meanwhile, the ringgit, palm's currency of trade, weakened 0.12% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Palm oil extends gains on strong rival oils
Palm oil extends gains on strong rival oils

Business Recorder

time2 days ago

  • Business Recorder

Palm oil extends gains on strong rival oils

KUALA LUMPUR: Malaysian palm oil futures ended higher on Thursday for a third consecutive session, tracking gains in rival edible oils, though higher production estimates and a stronger ringgit capped the rise. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 15 ringgit, or 0.35%, at 4,330 ringgit ($1,027.77) a metric ton at the close. 'The higher-than-expected production scenario has halted the rally in palm oil prices, while the ringgit continues to strengthen against the US dollar, which is also contributing to the decline in the ringgit-denominated contract,' said Anilkumar Bagani, research head at Sunvin Group. Adding to the cautious mood, fresh palm oil purchases by India have slowed down due to a sharp surge in prices, Bagani said. Dalian's most-active soyoil contract rose 1.16%, while its palm oil contract added 1.34%. Soyoil prices on the Chicago Board of Trade were up 0.59%. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. The ringgit, palm's currency of trade, strengthened 0.28% against the dollar, making the commodity more expensive for buyers holding foreign currencies. Oil prices rose more than 1%, buoyed by optimism over US trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in US crude inventories.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store