Asian Currency

Asian stocks climb amid easing Middle East tensions; currency markets diverge- Republic World

Stock exchange overview | Image:Unsplash

Stock market news: Most emerging Asian equities experienced gains on Monday as concerns about a broader conflict in the Middle East diminished. However, currency markets showed a mixed picture as the dollar’s strength overshadowed support from robust inflation data and hawkish comments from the Federal Reserve.

The MSCI’s broadest index of Asia-Pacific shares rose by 0.93 per cent on Monday, rebounding from a 4.5 per cent decline in the previous week, which witnessed heightened tensions in the Middle East following Israel’s retaliatory strike on Iran.

Analysts at MUFG noted, “The good news for now is that Iranian officials seem to be downplaying the Israeli response, but the situation is fluid and tensions can ratchet up quickly.”

Singapore shares surged by as much as 2 per cent, while Malaysian shares added up to 0.8 per cent. In South Korea, shares gained by up to 1.4 per cent, and Thai stocks jumped by as much as 1.2 per cent.

In contrast, Indonesian shares slipped by 0.8 per cent to their lowest level since December 1. This decline comes as the country awaits a verdict on challenges to the outcome of February’s presidential election, with the losing candidate alleging state interference in favor of the winner, Prabowo Subianto.

Currency markets in the region exhibited mixed performances as the U.S. dollar remained strong. The Thai baht weakened by as much as 0.5 per cent to its lowest level since October 2023, while the Taiwanese dollar fell by 0.3 per cent to its lowest level since 2016. The Malaysian ringgit and the Philippine peso remained largely unchanged, while the Indonesian rupiah gained 0.3 per cent.

Bank Indonesia is scheduled to announce its policy rate decision on Wednesday. Analysts at Barclays anticipate a rate increase on April 24, possibly not limited to 25 basis points but potentially reaching 50 basis points, citing the move as having more of a signaling effect rather than an immediate impact on the Indonesian rupiah.

In other developments, data from Seoul revealed an 11.1 per cent increase in exports for the first 20 days of April compared to the same period last year, while Taiwan is expected to report March export orders later in the day. Additionally, the Vietnamese dong remained largely unchanged, hovering near its lowest level on record reached last week.

(With Reuters inputs.)

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