Emerging markets: Thai shares and baht gain after central bank assurance as equities in Singapore gain most on Tuesday (Jan 11)

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SINGAPORE Jan 11 (Reuters): South Korea's won led gains among Asian currencies on Tuesday as upbeat economic data raised prospects of an interest rate hike, while telecom stocks kept Singapore shares on track for a fourth straight session of rise.

The Indian rupee, Malaysia's ringgit and Singapore's dollar firmed between 0.2% and 0.3%, as the US dollar stalled a day before crucial inflation data which could provide more clarity on policy normalisation by the Federal Reserve.

The won firmed by 0.4% to 1,194.70 per dollar, notching its best session since Dec. 1, as robust partial trade data for January added to the case for monetary policy tightening by the Bank of Korea (BoK) when it meets on Friday.

Maybank analysts said the won was helped by declining Covid-19 cases and fading concerns over geopolitical tensions fuelled by a North Korean hypersonic missile test, as well as a warning from the finance minister that currency moves were being watched.

"Focus shifts to the BoK monetary policy meeting as we look for a 25 basis point hike," the analysts said in a note, noting that stubbornly high inflation should prompt the central bank to continue its tightening cycle, having hiked rates twice already.

The Philippine peso firmed 0.1%, recouping earlier losses spurred by data showing the country's imports continued to outpace exports in November, taking its trade deficit to $4.71 billion. Surging fuel requirements could lead to Philippines' trade deficit ballooning further and hurt the peso, said Nicholas Mapa, a senior economist for the Philippines at ING.

Meanwhile, Bangkok shares and the baht rose 0.4% and 0.3%, respectively, as the Bank of Thailand assured that the Omicron coronavirus variant outbreak could be managed in the first half of 2022, with the economy expected to return to its pre-pandemic levels in 2023.

Among equities, Chinese shares fell 0.7% on concerns over domestic COVID-19 outbreaks, while most other markets posted muted gains.

Leading the gains, Singaporean stocks added 0.4%, driven by a 4% jump in Singapore Telecommunication (Singtel) on reports claiming the company was considering divesting its Australian fibre assets worth billions of dollars.

Singtel, however, said there was no assurance a deal would occur. - Reuters