Emerging Markets: Most Asian FX, equities fall as China's parliament meeting disappoints

Quanta Computer

05/03/2024 08:09

* 
      Equities in Malaysia fall 1%
    

        * 
      Taiwan shares hit new record high  
    

        * 
      China annual parliament meeting in focus 
    

  
 (Updates at 0654 GMT)
    By John Biju
       March 5 (Reuters) - Most Asian equities and currencies
retreated on Tuesday, as Chinese parliament's annual session
kept investors waiting for substantial policy measures to
stimulate growth in the world's second-largest economy and the
region's largest trading partner.
    MSCI's broadest index of Asia-Pacific shares outside Japan
 .MIAPJ0000PUS  retreated 1%. The Hang Seng China Enterprises
index  .HSCE , which includes Chinese stocks listed in Hong
Kong, fell as much as 3%. 
    In contrast, equities in Taiwan  .TWII  rose as much as 0.8%
to a new record high powered by strong gains in chip companies
such as Taiwan Semiconductor Manufacturing Co  2330.TW  and
Quanta Computer  2382.TW .   
    China's parliament, the National People's Congress (NPC),
started its annual session on Tuesday, where it retained last
year's target for economic growth of "around 5%" for this year
and announced plans to run a budget deficit of 3% of economic
output, down from a revised 3.8% last year.
    DBS analysts wrote that the growth target raises
expectations that officials will continue to unlock stimulus to
bolster confidence.  
    "We foresee both monetary and fiscal policies will have to
surprise to the upside in 2024 to achieve the goal of
stabilization and high quality of growth," they added.
    A string of recent data has pointed to a challenging
economic outlook for China. Investors now await inflation data
for February, due later in the week. 
    In Southeast Asia, data from the Philippines showed the
country's annual inflation sped up for the first time in five
months in February. 
    The Bangko Sentral ng Pilipinas (BSP) said that risks to the
inflation outlook have receded but remain tilted toward the
upside.
    Frances Cheung, a rates strategist at OCBC, said February
inflation was not inconsistent with BSP's full-year forecast,
which is unlikely to move the needle much for the monetary
policy outlook.
    "We continue to expect Philippines' easing cycle to start in
late 2024," Cheung said.
    In contrast, Thai inflation fell for a fifth consecutive
month in February. The Thai baht  THB=TH  retreated 0.4% while
stocks  .SETI  fell 0.2%. 
    Among currencies, the Taiwan dollar  TWD=TP , the South
Korean won  KRW=KFTC  and the Indonesian rupiah  IDR=  inched
0.2% lower.
    Elsewhere, the Bank Negara Malaysia (BNM) will announce its
interest rate decision on Thursday. 
    "The recent depreciation in the currency (ringgit) is
unlikely to prompt a hike or tightening in conditions by the
BNM. BNM is likely to keep the policy rate steady at 3.0% when
it meets later this week," Sim Moh Siong, a senior currency
strategist at Bank of Singapore wrote. 
    The ringgit inched 0.2% lower and has lost 2.9% so far this
year. Stocks in Malaysia  .KLSE  retreated 1%. 
    A testimony by the U.S. Federal Reserve Chair Jerome Powell
and U.S. jobs data for February later this week are also on
investors' radar.
    
    HIGHLIGHTS:    
    ** Inflation in Japan's capital re-accelerates in February
    ** China drops 'peaceful reunification' reference to Taiwan;
raises defence spending by 7.2%
        ** Indonesia's GDP may grow more than 5.1% in 2024,
cenbank gov says
    
    
  Asia stock indexes and                             
 currencies at 0654 GMT                         
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                
                                                
 Japan     JPY=      +0.03  -6.25  <.N2           
                                   25>            
                                         -0.03  19.82
                                                  
                                                  
 China                           EC>          
 India     INR=IN    -0.03  +0.35  <.NS  -0.25   2.85
                                   EI>          
 Indones   IDR=      -0.16  -2.32  <.JK  -0.32  -0.26
 ia                                SE>          
 Malaysi   MYR=      -0.19  -2.94  <.KL  -0.98   4.77
 a                                 SE>          
 Philipp   PHP=      -0.01  -1.07  <.PS  -0.36   7.39
 ines                              I>           
 S.Korea                         11>          
 Singapo   SGD=      -0.05  -1.84  <.ST  -0.46  -4.09
 re                                I>           
 Taiwan    TWD=TP    -0.18  -2.70  <.TW   0.42   8.12
                                   II>          
 Thailan   THB=TH    -0.36  -4.71  <.SE  -0.23  -3.99
 d                                 TI>          
 

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic: World FX rates     https://tmsnrt.rs/2RBWI5E
Asian stock markets    https://tmsnrt.rs/2zpUAr4
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by John Biju in Bengaluru; Editing by Michael Perry
and Mrigank Dhaniwala)
 ((John.Biju@thomsonreuters.com;))