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EMERGING MARKETS-South Korea, Indonesia lead muted gains in Asia after Wall St boost

Published 09/29/2020, 01:09 PM
Updated 09/29/2020, 01:10 PM
© Reuters.
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* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3lKhL5I
* South Korea stocks set for first monthly loss in five
* RBI delays monetary policy meeting

By Nikhil Nainan
Sept 29 (Reuters) - South Korea and Indonesia outperformed
other Asian emerging stock markets on Tuesday as overnight gains
on Wall Street lifted sentiment and investors looked to
rebalance their books into the month-end and a handful of
regional holidays.
Shares in Seoul .KS11 , where the Chuseok holiday runs from
Wednesday, and Jakarta .JKSE climbed around 0.8% and 0.5%,
respectively, although both were still on course to post their
first monthly loss since March.
Gains across the rest of Asia were more muted in comparison
to Wall Street's 1.5% overnight jump. .N
Chinese markets, often a driver for the region, will also be
on a week-long break starting Thursday.
"With the end of the month and the quarter upon markets, a
lot of portfolio rebalancing is occurring in the institutional
investor space," said Jeffrey Halley, a senior Asia-Pacific
market analyst at Oanda.
"In the absence of any headlines to disagree with the buy
everything premise, Asian stock markets look set to trade
positively today."
The bounce in U.S. stocks, developments on the U.S. stimulus
bill and the impending presidential debate later in the day also
kept the dollar in check, helping the region's emerging
currencies, though the rupiah IDR= dipped.
Bank Indonesia's governor told parliament on Monday to put
off regulatory reforms, including a new central bank mandate,
until next year, calling for the focus to remain on dealing with
the COVID-19 pandemic. Investors in in Indonesia's bond market have been unnerved
by thbe possibe change in the central bank law, that could
result in some loss of central bank independence.
Stocks .PSI and the peso PHP= in the Philippines were
little changed as partial coronavirus curbs were extended in
Manila through October. The country's central bank will meet on
Thursday, with economists predicting no change in policy.
India's central bank was also supposed to hold its policy
meeting on Thursday but in a notice on Monday, the Reserve Bank
of India said it would reschedule the meeting without giving a
reason or new date. The term of three external members of the monetary policy
committee ended earlier this month and the government has not
yet made fresh appointments.
Mizuho criticised the delay in a daily note, describing it
as "reckless neglect at a time when the economy cannot afford
policy fumbles."
The rupee INR=IN inched lower on Monday.
"The RBI needs to step up efforts to boost demand for
sovereign debt to keep India's government bond yields in check,"
Scotiabank said in a note.

HIGHLIGHTS:
** Indonesian 10-year benchmark yields up 3.5 basis points
to 6.95%​​
** Philippine 10-year benchmark yield is unchanged at 3.1%
** Unexplained RBI meeting delay raises policy concerns
stock indexes and currencies at 0346 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY % YTD %
Japan JPY= +0.03 +2.99 .N225 -0.33 -0.94
China CNY=CFXS -0.20 +2.04 .SSEC 0.52 6.04
India INR=IN +0.00 -3.25 .NSEI 0.00 -7.73
Indonesia IDR= -0.20 -6.72 .JKSE 0.50 -21.73
Malaysia MYR= +0.26 -1.75 .KLSE 0.16 -4.70
Philippines PHP= -0.02 +4.54 .PSI 0.07 -24.95
S.Korea KRW=KFTC +0.41 -1.06 .KS11 0.78 5.84
Singapore SGD= +0.08 -1.94 .STI 0.52 -22.56
Taiwan TWD=TP +0.75 +3.80 .TWII -0.11 3.77
Thailand THB=TH -0.09 -5.65 .SETI 0.03 -20.03

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