Emerging Markets: Asian shares sink as China orders U.S. consulate to shut in tit-for-tat move

Venture

24/07/2020 06:19

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

    By Shashwat Awasthi
    July 24 (Reuters) - Emerging Asian stock markets sank but
currencies were mixed against a weakened U.S. dollar on Friday
as China made a tit-for-tat move by ordering the U.S. consulate
in Chengdu to shut, stoking fears over relations between the
world's two largest economies.
    Singapore  .STI , Thailand  .SETI  and Malaysia  .KLSE  all
tumbled more than 1%, while Indonesia  .JKSE  and trade-reliant
South Korea  .KS11  were each 0.9% lower after Beijing
retaliated after the United States ordered the Chinese consulate
in Houston to close.  urn:newsml:reuters.com:*:nB9N2EM03G
    "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," Mizhuo
analysts said.
    Bangkok shares hit their lowest in 10 days and the baht
 THB=TH  eased, with the gloom heightened by data showing
Thailand's exports in June fell more than feared.  urn:newsml:reuters.com:*:nB7N2BG020
    Currencies across the region have been propped up this week
by broad weakness of the dollar, whose safe-haven appeal has
been undermined by the Sino-U.S. tensions and doubts over the
latest round of U.S. stimulus.
    Indonesia's rupiah  IDR=  strengthened for the fourth
straight day and moved closer to recouping all of the more than
2% loss it suffered last week.
    "We remain constructive on the rupiah, as the currency is
under-valued relative to our fair value estimate, and we see
foreign investor concerns over debt monetisation easing," ANZ
Research analysts wrote.
    "This should pave the way for a pick-up in bond inflows
given the yield attractiveness, which tend to lead to a
strengthening in the currency."
    A senior finance ministry official said the Indonesian
government may begin selling bonds directly to the central bank
next week under a fiscal deficit financing scheme.  urn:newsml:reuters.com:*:nL2N2EV037
    As the number of coronavirus cases continued to grow,
Indonesia's finance ministry on Friday revised its outlook for
2020 gross domestic product (GDP) to predict zero growth or a
slight contraction.  urn:newsml:reuters.com:*:nL2N2EV03D  urn:newsml:reuters.com:*:nL3N2EU1XO
    
    HIGHLIGHTS:
    
    ** Indonesian 10-year benchmark yields are down 4.4 basis
points at 6.865%
    ** Top losers on Thailand's SETI  .SETI  include Thai-German
Products PCL  TGPRO.BK  down 14.29%, Union Pioneer PCL  UPF.BK 
down 13.13% and G J Steel PCL  GJS.BK  down 9.09%
    ** Top losers on the Singapore STI  .STI  include Keppel
Corporation  KPLM.SI  down 3.36%, Venture Corporation  VENM.SI 
down 3.26% and DBS Group  DBSM.SI  down 2.18%
    
    
  Asia stock indexes and currencies at 0407 GMT                                           
   COUNTRY      FX RIC     FX DAILY %   FX YTD %    INDEX    STOCKS DAILY %  STOCKS YTD %
    Japan        JPY=         +0.44       +2.10     .N225        -0.58           -3.83
    China      CNY=CFXS       -0.20       -0.78     .SSEC        -2.25           6.57
    India       INR=IN        -0.15       -4.73     .NSEI        -0.57           -8.36
  Indonesia      IDR=         +0.21       -4.41     .JKSE        -0.81          -18.99
  Malaysia       MYR=         -0.14       -4.06     .KLSE        -1.18           -0.08
 Philippines     PHP=         +0.12       +2.59      .PSI        -0.27          -23.06
   S.Korea     KRW=KFTC       -0.31       -3.71     .KS11        -0.64           0.20
  Singapore      SGD=         +0.01       -2.97      .STI        -1.41          -20.09
   Taiwan       TWD=TP        +0.31       +2.24     .TWII        -0.72           2.72
  Thailand      THB=TH        -0.09       -5.77     .SETI        -1.18          -14.95
 
 (Reporting by Shashwat Awasthi and A K Pranav in Bengaluru;
editing by Patrick Graham and Simon Cameron-Moore)
 ((Shashwat.Awasthi@thomsonreuters.com; +91 80 61822606;))