Stocks in emerging Asian markets edged higher on Thursday, helped by China, though South Korean shares were hit by weak economic growth, while Malaysia's ringgit hovered around a one-month high a day after the central bank held rates steady.
A gauge of emerging Asian equities inched higher as South Korean shares, which make up around 11% of the index, fell as much as 1% led by SK Hynix and Samsung Electronics slipping around 1% each.
Data showed the East Asian economy barely grew in the fourth quarter of 2024, missing market expectations, as the country's worst political crisis in decades hurts already weakened domestic demand. The South Korean won was last trading at 1,436.4, a few pips off its five-week high it hit on Wednesday.
Analysts at Maybank highlighted "plenty of concerns" for the won despite its recent strength. Besides the political uncertainty, "there also remains risks that the BOK (Bank of Korea) could cut rates in the coming months given the economic concerns," they said.
Stocks in China jumped after Beijing announced fresh measures to bolster its flagging stock market. The CSI300 blue-chip index and the Shanghai Composite Index advanced as much as 1.8% and 1.9%, both indexes hitting their highest level since early January. China makes up more than one-third of the MSCI's index of emerging Asian equities.
The dollar index was flat at 108.28, after tumbling from 109.34 on Monday - the steepest one-day slide since November 2023 - as Trump's first day in office brought a barrage of executive orders though none on tariffs. However, he did threaten more tariffs on a number of trading partners.
"If he (Trump) follows through with his tariff threat on China, it could put renewed depreciation on Asian currencies," said Lloyd Chan, a senior currency analyst at MUFG Bank. The Malaysian ringgit slipped but continued to hover near a one-month high after its central bank held interest rates steady on Wednesday.
Stocks in Kuala Lumpur were down 0.7%. Stocks in Indonesia and Singapore jumped 0.6% and 0.7%, respectively, with those in Jakarta strengthening for a seventh consecutive session. Traders are awaiting the Monetary Authority of Singapore's first policy decision of 2025 due on Friday.
Economists polled by Reuters are split evenly on whether the central bank will loosen its settings or stand pat to closely assess Trump's policies. Traders are also looking keenly to the Bank of Japan's (BOJ) policy decision due on Friday. Markets are increasingly confident that the BOJ will raise its short-term policy rate on Friday by a quarter-point to 0.5%.
Highlights:
** Indonesia's 10 year benchmark yield slips to two-week low of 7.096%
** SK Hynix profit surpasses Samsung, but shares dip on lower memory chip demand ** Singapore forms committee on election, signalling polls ahead
** Taiwan equity markets on holiday - Reuters
