Philippine stocks led gains in most Asian equity markets on Wednesday, while currencies were stable against a weak dollar, with the Thai baht easing ahead of a rate decision later in the day where Bank of Thailand is expected to keep rates steady.
Stocks in Manila and Kuala Lumpur rose 0.9% and 0.5%, respectively. A gauge of emerging Asian equities advanced 1.1%.
Data on Tuesday showed U.S. consumer confidence deteriorated at its sharpest pace in 3-1/2 years in February – suggesting that businesses and consumers were becoming increasingly rattled by the Trump administration’s policies.
The U.S. dollar index, which measures the currency against six major rivals, rose 0.3%.
In Asia, the Malaysian ringgit, the Philippine peso and the Indian rupee largely traded flat. The Singapore dollar and the Indonesian rupiah retreated by 0.2% and 0.3%, respectively.
“The most important source of volatility had been tariffs, but so far, we see these as largely still within expectations; bigger tariff sticks after April 1st could keep EM FX vulnerable but tariff-vulnerable EM have policy space to offset growth shocks via lower rates,” Citi analyst Johanna Chua said in a note.
The Bank of Thailand is likely to hold its rate steady, but Maybank economists predict a 25 basis point cut in the first half of 2025 due to growth concerns.
The baht lost as much as 0.2% ahead of the decision, while shares in Bangkok advanced 0.9%.
The Taiwan dollar traded flat as focus shifts to a revised estimate for the island’s economic output for the fourth quarter of 2024, due to be released later in the day.
China accused Taiwan of attempting to hand over its semiconductor industry to the U.S. as a “souvenir” to gain political backing from Washington.
This follows the Trump administration’s plans to impose stricter U.S. semiconductor restrictions and encourage allies to tighten their controls on China’s chip industry.
HIGHLIGHTS:
** Philippines should withdraw missile system from South China Sea, Chinese state media says
** China says Taiwan ‘manipulating’ undersea cable cutting incident
** Indonesian nickel production capacity to grow significantly by 2027, official says – Reuters