EMERGING MARKETS-Stocks sink as China retaliates for Houston, Thai exports sink 23%

    * Graphic: World FX rates http://tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA
    * Baht set for fourth straight weekly loss
    * Singapore stocks hit lowest since June 29
    * Malaysia stocks set for worst day in 5 weeks

    By Shashwat Awasthi
    July 24 (Reuters) - Thai shares led a slide in emerging Asian markets on Friday as a
bigger-than-expected drop in June exports added to the impact on sentiment across the region
from the diplomatic spat between China and the United States.
    Benchmark indexes in Singapore <.STI>, Indonesia <.JKSE> and Malaysia <.KLSE> all tumbled
more than 1%, following a near 4% plunge in Chinese equities <.SSEC> after China ordered the
U.S. consulate in Chengdu to shut, a reprisal for its Houston consulate being closed this week.
    Bangkok shares <.SETI> hit their lowest in 10 days, with trade data adding to the gloom and
highlighting the damage caused by the coronavirus pandemic. [nB7N2BG020]
    "While the inevitability of deteriorating U.S.-China relations as a structural feature of
our geo-political landscape was never in doubt, the shifts appear to be hastened," Mizuho
analysts said.
    Currencies across the region have been propped up this week by broad weakness of the dollar
amid Sino-U.S. tensions and doubts over the latest round of U.S. stimulus, and many eked out
gains again on Friday.
    "Forex markets' U.S.-China rhetoric herd-immunity appears to be getting stronger by the day,
as they accept the conflict as the new norm," said Jeffrey Halley, a market analyst at trading
platform OANDA.
    A Reuters poll on Thursday showed that investors had raised their long bets on the Chinese
yuan and most other Asian currencies, on signs of a recovery in the world's second-largest
economy and news of progress in coronavirus vaccine trials. [nL3N2EU1G0]
    The Thai baht  eased 0.2%, however, and was set to weaken for the fourth successive
week as policy uncertainty lingered.
    Policymakers had earlier feared that a rapid rise in the currency could hinder Thailand's
economic recovery and the June data showed exports sank 23% from a year earlier, the worst since
July 2009. [nL4N2DO0RH]
    Indonesia's rupiah  strengthened for the fourth straight day and continued to recoup
the more than 2% loss it suffered last week.
    A senior finance ministry official said the government may begin selling bonds directly to
the central bank next week under a fiscal deficit financing scheme. [nL2N2EV037]
    As the number of coronavirus cases continued to grow, the finance ministry cut its economic
outlook to zero growth or a slight contraction in 2020, which weighed on Jakarta stocks <.JKSE>.
[nL2N2EV03D] [nL3N2EU1XO]
    ** Indonesian 10-year benchmark yields are down 5.9 basis points at 6.85%
    ** Top losers on Thailand's SETI <.SETI> include Matichon PCL  down 13.39%, Union
Pioneer PCL  down 13.13% and G J Steel PCL  down 9.09%
    ** Top losers on FTSE Bursa Malaysia Kl Index <.KLSE> include Petronas Dagangan 
down 3.99%, PETRONAS Chemicals Group  down 2.96% and Top Glove Corporation 
down 2.68%
  Asia stock indexes and currencies at 0703 GMT                                             
    Japan                +0.54       +2.19      <.N225>       -0.58          -3.83
    China            -0.19       -0.77      <.SSEC>       -3.60           5.09
    India              -0.06       -4.64      <.NSEI>       -0.75          -8.53
  Indonesia              +0.07       -4.54      <.JKSE>       -1.21          -19.31
   Malaysia              -0.07       -3.99      <.KLSE>       -1.20          -0.10
 Philippines             +0.15       +2.62      <.PSI>        -0.43          -23.19
   S.Korea           -0.35       -3.75      <.KS11>       -0.71           0.13
  Singapore              +0.02       -2.96      <.STI>        -0.97          -19.72
    Taiwan             +0.29       +2.22      <.TWII>       -0.88           2.56
   Thailand            -0.09       -5.77      <.SETI>       -1.23          -14.99
 (Reporting by Shashwat Awasthi and A K Pranav in Bengaluru; Editing by Subhranshu Sahu)
 ((Shashwat.Awasthi@thomsonreuters.com; +91 80 61822606;))


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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