Emerging Asia equities held firm near early-2021 highs on Tuesday, driven by records in Taiwan, Singapore and Indonesia, as investors looked past the U.S. intervention in Venezuela to focus on macroeconomic data and the ongoing AI investment boom.
The MSCI index of emerging Asia equities jumped 1% to its highest since mid-February 2021, while its broadest index of Asia-Pacific shares including Japan touched a record high.
A broader index of global EM equities extended gains into an eighth consecutive session to hit a record high. Investors broadly shrugged off the U.S. capture of Venezuelan President Nicolas Maduro and its potential implications on the oil market, leading equities to all-time highs largely driven by AI-related capital flows.
Moreover, a sharp contraction in U.S. factory activity in December and dovish comments by Federal Reserve officials spurred risk-on sentiment on Wall Street overnight, which spilled into Asian markets.
Swaps indicate a nearly 84% probability of a hold from the Fed at its January meeting, but indicate around 39% chances of a 25-basis-point cut in March.
"The general market was likely to move its focus away from the Latin America issue and towards U.S. data and the pace of Fed easing," Maybank analysts wrote in a note.
Taiwan's tech-heavy benchmark stock index rose as much as 1.4% to surge past 30,500 points for the first time. It was last trading at a record 30,508 points in afternoon trade. Taiwan's dollar also gained around 0.2%.
However, shares in Seoul snapped a two-day winning streak to slip marginally, dragged lower by a 2.1% decline in chipmaker Samsung Electronics. Investors await Samsung's fourth-quarter earnings, with markets expecting the world's top memory chip maker to flag a 160% jump in its operating profit for the period.
Elsewhere, Singapore's FTSE Straits Times index jumped 1.3%, while Indonesia's Jakarta Composite index advanced 0.5%, both scaling record peaks. Stocks in Manila rose as much as 1.9% to their highest since September 19, 2025.
The Philippine central bank said there was "ground for one more cut" in 2026 if growth fell below 5%, and that, given the current data, the Bangko Sentral ng Pilipinas would not be cutting rates.
Currencies in the region were mostly firmer against a steady U.S. dollar, with the Malaysian ringgit rising 0.4%, while the Singapore dollar rose 0.1% to its highest since September 18, 2025.
Bucking the trend, the Indonesian rupiah was down 0.2%.
"We expect an underperformance from the Indonesian rupiah, due to fiscal and governance concerns," said Alex Holmes, regional director for APAC at Economist Intelligence Unit.
HIGHLIGHTS:
** Indian state-run banks snap up another $1 billion bonds as yields stay elevated
** Flash floods in Indonesia's North Sulawesi kill 14, four still missing
** Japan's cash in circulation falls for first time in 18 years in 2025 on BOJ stimulus exit - Reuters
