EMERGING MARKETS-Philippines, Indonesia recover after U.S. data boost

Credit: REUTERS/BEAWIHARTA

Share markets in Indonesia and the Philippines recovered more than 1% on Tuesday after sharp falls a day earlier, as strong U.S. manufacturing data and gains on Wall Street countered worries over surging coronavirus cases at home.

By Rashmi Ashok

Aug 4 (Reuters) - Share markets in Indonesia and the Philippines recovered more than 1% on Tuesday after sharp falls a day earlier, as strong U.S. manufacturing data and gains on Wall Street countered worries over surging coronavirus cases at home.

Both benchmarks .JKSE, .PSI sank on Monday after Indonesia and the Philippines extended their lockdowns.

A number of analysts have said the second round of restrictions will spell more economic pain than the first, given that corporate cash reserves have now dried up and many citizens are already out of work.

Jeffrey Halley, senior market analyst for Asia Pacific at OANDA said that Monday's U.S. PMI survey had propped up expectations that a modest global recovery was on the way. But, he reckoned the gains in Philippines and Indonesia could be bargain hunting, and could quickly evaporate.

"The flows look very much like fast money and it wouldn't take much to send them scurrying for the exit doors just as quickly," he added.

Monday's survey showed U.S. manufacturing activity expanded in July at the fastest pace in more than a year, pushing Wall Street shares higher.

The dollar was again weak, helping most Asian currencies to gain ground, with the Thai baht THB=TH firming 0.4% to 31.1 ahead of a central bank monetary policy meeting on Wednesday.

The Bank of Thailand is expected to stand pat on rates, having cut three times this year to an all-time low of 0.50%.

"We consider the BoT's rate cut cycle has bottomed (out). An on-hold policy rate at the current level for the foreseeable future remains our baseline through 2021, at the least," ING said in a note.

The Indonesian rupiah IDR= weakened 0.3% ahead of the release on Wednesday of second quarter gross domestic product (GDP) data that is expected to show the economy's biggest contraction in more than two decades.

Combined with weak July inflation data released on Monday, the data is expected to fuel bets on another central bank rate cut.

HIGHLIGHTS

** Top gainers on the Singapore STI .STI include Jardine Cycle & Carriage Ltd JCYC.SI up 4.28% and Jardine Matheson Holdings Ltd JARD.SI up 2.74%

** Top gainers on FTSE Bursa Malaysia Kl Index .KLSE include Genting Bhd GENT.KL adding 1.91% and PPB Group Bhd PEPT.KL up 1.72%

** Thailand's 3-year benchmark yield climbed 1 basis points to 0.555%​​, while Indonesian 3-year benchmark yields fell 0.9 basis points to 5.339%​​

Asia stock indexes and currencies at 0358 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.15

+2.37

.N225

1.42

-4.85

China

CNY=CFXS

+0.02

-0.25

.SSEC

0.09

10.52

India

INR=IN

+0.00

-4.84

.NSEI

0.51

-10.04

Indonesia

IDR=

-0.27

-4.93

.JKSE

0.98

-19.75

Malaysia

MYR=

+0.17

-2.99

.KLSE

-0.68

-1.69

Philippines

PHP=

-0.02

+3.16

.PSI

1.08

-26.07

S.Korea

KRW=KFTC

-0.03

-3.13

.KS11

1.03

3.49

Singapore

SGD=

+0.00

-2.30

.STI

0.73

-22.33

Taiwan

TWD=TP

+0.39

+2.35

.TWII

1.00

5.34

Thailand

THB=TH

+0.42

-3.83

.SETI

0.64

-15.83

(Reporting by Rashmi Ashok; editing by Patrick Graham and Simon Cameron-Moore)

((Rashmi.Ashok@thomsonreuters.com; +918061822604;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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