Emerging markets: Indonesia leads South-East Asia stocks higher as economic worries cap gains


  • AseanPlus News
  • Friday, 25 Sep 2020

JAKARTA, Sept 25 (Reuters): India and Indonesia shares led gains in Asia on Friday as signs of progress on US fiscal stimulus eased the pressure on stock markets globally, although concerns about a second wave of coronavirus infections capped gains again.

Asian stocks tracked Wall Street's strong finish overnight after a US lawmaker said Democrats in the House of Representatives were working on a $2.2 trillion stimulus package to support the pandemic-ravaged economy. India and Indonesia stocks gained about 2% each.

Jakarta's main index, weighed down by a new wave of virus cases and concerns over moves to change its central bank law, had shed more than 4% this week.

A resurgence in COVID-19 infections across Europe, along with weak economic indicators, led world stocks to mark some of their worst weekly declines in months.

"From an investment perspective, the economic outlook as we enter the final stretch of 2020 is as uncertain as ever," BCA Research analysts said in a client note.

"The potential for renewed lockdowns, a fiscal cliff in the United States, political uncertainty due to Brexit, and the possibility of a contested US election all make for a very complex decision tree."

Other Asian equity markets posted modest gains on Friday, with Singapore, Malaysia and South Korea adding 0.3% to 0.8%. South Korea's KOSPI was down 5.5% for the week, its worst performance since March.

In China, a strong influence over many of the region's markets, the yuan rose 0.2% after news that the country's government bonds would be included in FTSE Russell's flagship World Government Bond Index (WGBI).

In the same announcement by FTSE Russell, Malaysian bonds remained on a waiting list for possible removal, holding back the Malaysian ringgit, which has also suffered from fresh political turbulence in Kuala Lumpur this week. Malaysian 10-year bond yields rose around 1 basis point, touching their highest since mid-July. - Reuters

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