EMERGING MARKETS-Thai baht down ahead of policy decision; Singapore leads Asian shares up

By Savyata Mishra

Jan 25 (Reuters)Asian emerging markets trickled back to life on Wednesday after the Lunar New Year holiday, with the Thai baht dipping ahead of a central bank policy rate decision, while Singapore shares hit a near nine-month high ahead of inflation data.

the baht THB=TH fell 0.3% despite expectations the Bank of Thailand will hike rates by another 25 basis points (bps) later in the day to curb elevated inflation.

The baht has appreciated by 5.3% against the dollar so far this year, becoming Asia’s best performing currency, driven by a weaker dollar and China’s earlier-than-expected reopening.

Foreign visitors to the country surged last year from a year ago, with the country’s vital tourism sector set for a further boost from a recently approved $120 million budget.

The dollar index =USD continued to weaken from the earlier session, after data showed US business activity shrank for a seventh straight month. Markets expect a 25 bps rate hike from the Federal Reserve in February.

Most regional markets resumed trading after a holiday-extended weekend, though China, Taiwan and Hong Kong remained shut.

Malaysia’s ringgit MYR= rose 0.3%, the South Korean won KRW=KFTC firmed 0.2% and the Indian rupee INR=IN was up as much as 0.3%.

China’s abrupt dismantling of its strict COVID measures has driven a recovery in risk appetite in Asia in the recent weeks, with Thailand, Singapore and Malaysia emerging as the top beneficiaries.

Singapore’s dollar SGD= rose 0.2%. Analysts at Maybank expect the medium-term outlook for the currency to be underpinned by potential tightening move by the central bank and China’s reopening.

The country’s budget on Feb. 14 will be parsed for hints on the government’s medium-term priorities for the Singapore economy, Maybank added.

Singapore’s core inflation rate – which excludes private road transport and accommodation costs – was 5.1% in December, unchanged from the same pace in November but slightly higher than forecast.

Indonesia’s rupiah IDR= slipped 0.5%, reversing a sharp 1.2% jump a day earlier. The country’s central bank last week signaled an early end to its tightening cycle.

Asian equities rose even as the extended market closure in China capped volumes. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.4% to a seven-month high.

Singapore’s Straits Times index .STI jumped 1.8% to its highest since May 5 and Seoul shares .KS11 climbed 1.4%.

Philippines stock .PSI rose 0.3% after a delayed opening on Wednesday because of a technical issue, the bourse operator PSE.PS said.

Indian shares .NSEI fell 0.9%, Jakarta stocks .JKSE were down 0.4% and Malaysian shares .KLSE declined 0.3%.

HIGHLIGHTS:

** Indonesia’s foreign direct investment surged 44.2% on a yearly basis in 2022, the investment minister said on Tuesday, noting 2023 would be a more difficult year to attract investment

** Thailand’s exports contracted more than expected in December and only modest growth was expected for 2023 with a strong baht currency hurting trade competitiveness, the commerce ministry said

Asia stock indexes and currencies at 0419 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.21

+0.52

.N225

0.55

5.17

china

CNY=CFXS

+1.54

.SSEC

5.68

India

INR=IN

+0.22

+1.45

.NSEI

-0.48

-0.41

Indonesia

IDR=

-0.43

+4.11

.JKSE

-0.30

-0.15

Malaysia

MYR=

+0.30

+3.04

.KLSE

-0.21

0.12

Philippines

PHP=

-0.13

+1.89

.PSI

0.32

7.58

S.Korea

KRW=KFTC

+0.19

+2.55

.KS11

1.31

8.51

Singapore

SGD=

+0.11

+1.65

.STI

1.78

3.11

Taiwan

TWD=TP

+1.12

.TWII

5.62

Thailand

THB=TH

-0.35

+5.23

.SET

0.03

0.88

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

Asian stock marketshttps://tmsnrt.rs/2zpUAr4

(Reporting by Savyata Mishra in Bengaluru; Editing by Kim Coghill)

((Savyata.Mishra@thomsonreuters.com;))

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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