Oil surge impacting Asian stock markets

Indonesia and Malaysia are the world’s top two exporters of palm oil, a status that has helped attract investors amid a global stock rout. A resilient ringgit has supported foreign inflows into Malaysian stocks. Down a little more than 1% since Feb 23, the local equity benchmark is faring better than the regional market.“It’s the classic inflation hedge,” said Wai Ho Leong, a strategist at Modular Asset Management in Singapore. “I’d be looking for Malaysia assets to buy on the cheap,” he said, adding the currency is still “fundamentally undervalued.”

SINGAPORE: The historic surge in oil is reshaping the outlook for Asian equity and currency markets, as the spectre of prolonged high prices exposes the vulnerability of energy-dependent countries.

Risks of a rise in consumer prices and disruption to current-account balances have triggered strong foreign outflows from equities in markets like India and South Korea in recent days, spurring weakness in their currencies.