SINGAPORE, Aug 28 (Reuters): Singapore stocks dropped 1% on Friday (Aug 27) as investors cut exposure to riskier assets over concerns of a shift in the US Federal Reserve's pandemic-era accommodative stance and fears of geopolitical instability.
Other emerging Asian markets were mixed in a low-volume trade at end week after rallying for most of the week, as investors weighed indications from Fed officials that the central bank may begin paring bond purchases soon.
"Markets reckoned they might have been too hasty in brushing aside the Fed's Jackson Hole Economic Symposium as a non-event," DBS analysts said in a note.
A dovish tone from Federal Reserve Chair Jerome Powell could counter worries about economic damage from the Delta coronavirus variant and fears about political fallout from a bomb attack in Kabul, possibly spurring bids in riskier currencies against the dollar.
An Islamic State suicide bomber killed 85 people, including 13 US soldiers outside the gates of Kabul airport on Thursday. U.S. forces are currently bracing for more attacks. Stocks in Singapore hit their lowest in more than three months.
"The 'taper tantrum' syndrome fear has resurfaced, and plus, we head into the weekend with geopolitical risk on the rise in the Middle East," said Kelvin Wong, an analyst at CMC Markets, referring to Singapore equities.
Stocks in Taiwan extended gains to a fifth session, helped by a bounce in semiconductor shares worldwide. Last week, the government urged state-run banks to buy stocks to soften the tumble.
Currencies in emerging markets strengthened against the dollar, with the Indonesian rupiah being an outlier. The Philippine peso weakened as much as 0.3%, before clawing back later in the day.
The peso's lacklustre open was in reaction to comments from authorities suggesting that the Philippines would take longer than expected to emerge from the subdued economic activity, according to Nicholas Mapa, a senior economist at ING.
Local media reported that Socioeconomic Planning Secretary Karl Kendrick Chua forecast the Philippines could return to pre-COVID GDP levels by as late as 2023.
"Sentiment is shifting quickly and affecting foreign buying and selling in the local equity market," Mapa said.
Thai stocks extended gains to a sixth day and hit their highest in two months after the country said it would ease some Covid-19 restrictions on Friday (Aug 27) evening.
Other emerging Asian markets were mixed in a low-volume trade at end week after rallying for most of the week, as investors weighed indications from Fed officials that the central bank may begin paring bond purchases soon.
"Markets reckoned they might have been too hasty in brushing aside the Fed's Jackson Hole Economic Symposium as a non-event," DBS analysts said in a note.
A dovish tone from Federal Reserve Chair Jerome Powell could counter worries about economic damage from the Delta coronavirus variant and fears about political fallout from a bomb attack in Kabul, possibly spurring bids in riskier currencies against the dollar.
An Islamic State suicide bomber killed 85 people, including 13 US soldiers outside the gates of Kabul airport on Thursday. U.S. forces are currently bracing for more attacks. Stocks in Singapore hit their lowest in more than three months.
"The 'taper tantrum' syndrome fear has resurfaced, and plus, we head into the weekend with geopolitical risk on the rise in the Middle East," said Kelvin Wong, an analyst at CMC Markets, referring to Singapore equities.
Stocks in Taiwan extended gains to a fifth session, helped by a bounce in semiconductor shares worldwide. Last week, the government urged state-run banks to buy stocks to soften the tumble.
Currencies in emerging markets strengthened against the dollar, with the Indonesian rupiah being an outlier. The Philippine peso weakened as much as 0.3%, before clawing back later in the day.
The peso's lacklustre open was in reaction to comments from authorities suggesting that the Philippines would take longer than expected to emerge from the subdued economic activity, according to Nicholas Mapa, a senior economist at ING.
Local media reported that Socioeconomic Planning Secretary Karl Kendrick Chua forecast the Philippines could return to pre-COVID GDP levels by as late as 2023.
"Sentiment is shifting quickly and affecting foreign buying and selling in the local equity market," Mapa said.
Thai stocks extended gains to a sixth day and hit their highest in two months after the country said it would ease some Covid-19 restrictions on Friday (Aug 27) evening.
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