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EMERGING MARKETS-Taiwan stocks lead losses in Asia on inflation fears, virus curbs

Stock MarketsMay 11, 2021 16:10
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© Reuters.

* Graphic: World FX rates
* Graphic: Foreign flows into Asian stocks
* Taiwan stocks post biggest drop since March 19, 2020
* Taiwan dollar retreats from a near 24-year high
* Virus-led curbs in Malaysia, Philippines, Indonesia weigh

By Rashmi Ashok
May 11 (Reuters) - Tech-heavy equities in Taiwan and South
Korea led losses in Asian markets on Tuesday, as investors were
concerned over a potential spike in inflation, while rising
COVID-19 cases and curbs in other parts of the region further
dampened sentiment.
U.S. stocks toppled off record highs overnight as traders
fretted that strong demand amid tight supply of basic materials
could sharply accelerate consumer prices, with markets now on
edge ahead of U.S. inflation data due later on Wednesday.
A spike in inflation could force the U.S. Federal Reserve to
raise interest rates sooner than planned, which could put Asia's
central banks in a tough spot, as a resurgence in COVID-19 cases
and lockdowns make it more difficult for lenders to play
Shares in Taipei .TWII ended 3.8% lower in their worst
session since March 19, 2020, as heavyweight chipmakers fell.
The Taiwan dollar TWD=TP , heavily reliant on exports, weakened
0.4% to pull back from a near 24-year high scaled in the
previous session.
Equities in Seoul .KS11 closed 1.2% lower, with the won
KRW=KFTC weakened 0.5%.
In other parts of Asia, raging COVID-19 outbreaks continued
to drag on markets, outweighing economic prints showing signs of
recovery in the first quarter.
"A large portion of the ASEAN recovery rests on how the next
two weeks play out across the region with the COVID-19," said
Jeffrey Halley, market analyst at OANDA, noting various forms of
restrictions implemented across the region.
Malaysia's stocks .KLSE were off 0.7% and the ringgit
MYR= weakened 0.2%, after the country imposed a new nationwide
lockdown to halt a third wave of infections, which is putting a
strain on its healthcare system.
Data showed its economy contracted by a
smaller-than-expected margin in the first quarter, supported by
In Philippines, where partial lockdown measures were
tightened last month, authorities detected its first two cases
of a coronavirus variant initially identified in India, which
some preliminary studies have shown spreads more easily.
Data showed Philippines' gross domestic product fell a
larger-than-expected 4.2% in the March quarter, though
sequential output figures showed a recovery was underway.
The Bangko Sentral ng Pilipinas will hold a monetary policy
meeting on Wednesday, where it is largely expected to keep rates
unchanged at record lows, with comments on the impact of the
latest curbs keenly watched.
Indonesia recently recorded cases of the variant first
detected in India, leading to a ban on the traditional mass
exodus where people visit relatives for the Eid al-Fitr
festival. HIGHLIGHTS:
** Top losers on FTSE Bursa Malaysia Kl Index .KLSE
include Genting Malaysia GENM.KL down 3.17% and Genting
GENT.KL down 2.04%
** Top losers on the Jakarta stock index .JKSE include Pt
Dms Propertindo Tbk KOTA.JK and Perdana Bangun Pusaka Tbk PT
KONI.JK , both down 6.99%
** Indonesian 10-year benchmark yields are up 2.5 basis
points at 6.429%​​ while 3-year benchmark yields are up 0.1
basis points at 5.023%

Asia stock indexes and
currencies at 0738 GMT
% % %
Japan JPY= -0.11 -5.20 <.N2 -3.08 4.24
China S> EC>
India INR=IN -0.09 -0.48 <.NS -0.58 6.25
Indones IDR= -0.07 -1.16 <.JK -0.93 -0.98
ia SE>
Malaysi MYR= -0.24 -2.31 <.KL -0.60 -3.24
a SE>
Philipp PHP= -0.02 +0.37 <.PS 0.15 -11.3
ines I> 9
S.Korea C> 11>
Singapo SGD= -0.13 -0.47 <.ST -0.91 10.89
re I>
Taiwan TWD=TP -0.44 +1.95 <.TW -3.79 12.56
Thailan THB=TH -0.03 -3.60 <.SE -0.70 8.81
d TI>

(Editing by Sherry Jacob-Phillips)

EMERGING MARKETS-Taiwan stocks lead losses in Asia on inflation fears, virus curbs

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