Emerging markets - Stocks in Asia rising on Nvidia results, Asian FX also inches higher


HANOI (Reuters): Equities in Taiwan and South Korea rose on Thursday as chip-related stocks jumped after US chipmaker Nvidia's outlook beat expectations and currencies rose marginally higher with Federal Reserve minutes cementing bets the central bank will not cut rates soon.

Taiwan shares rose as much as 1.1% to hit a fresh all-time high, while stocks in South Korea added as much as 0.7%. Nvidia on Wednesday forecast a roughly threefold surge in quarterly revenue that handily beat estimates on towering demand for its industry-leading artificial intelligence chips.

Other stock markets were mixed, with Thailand stocks gaining as much as 0.5% and Malaysian shares losing 0.5%. Currencies in the region inched higher after being muted earlier in the session.

The greenback was lower after minutes of the Fed's Jan. 30-31 meeting showed policymakers were concerned about the risks of cutting interest rates too soon.

The Malaysian ringgit was 0.2% higher, but was trading at lows not seen since the Asian Financial Crisis as outflows, foreign currency hoarding and a strong dollar piled on pressure. It touched 4.801 to the dollar on Wednesday, its weakest since January 1998.

"Some of the drivers of ringgit weakness are temporary. We expect the USD to weaken once the Fed eventually cuts rates, providing respite for the ringgit," said Khoon Goh, head of Asia research at ANZ.

In South Korea, the central bank left interest rates at a 15-year high as expected with inflation staying above the target level. Recent inflation prints in Asian economies have shown easing price trends, giving central banks some breathing room.

This comes a day after Indonesia's central bank also kept policy rates steady as expected, and reiterated it would likely have room to cut borrowing costs in the second half of the year.

Investors' focus, however, remained on the timing of policy easing in South-East Asia.

Thailand's central bank is ready to adjust rates if the economy and inflation change significantly, minutes of its Feb. 7 policy meeting showed.

Its Prime Minister and Finance Minister Srettha Thavisin, who has been at loggerheads with the central bank over the monetary policy direction, said he would continue pushing the central bank to cut rates and would meet its governor again to discuss the issue at an appropriate time.

China's recent policy decision to slash its five-year loan prime rate by 25bps can be one example for other central banks to reduce policy rates as domestic economic growth tends to slow, analysts at Maybank said.

South Korean won appreciated 0.5%, while Indonesian rupiah was up 0.2%. Investors cautiously await January inflation data from Malaysia and Singapore, both due on Friday. - Reuters

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