EMERGING MARKETS-Asian FX slips ahead of inflation data, Korean stocks buck AI selloff
By Roshan Thomas
Nov 2 (Reuters) - Emerging Asian currencies edged lower against the dollar on Monday, while equities were mixed as investors digested the AI rout and awaited a raft of inflation data.
An MSCI gauge of emerging-market currencies .MIEM00000CUS slipped 0.2% against a steady dollar as markets looked ahead to US midterm elections that could determine control of Congress and shape spending priorities.
The Singapore dollar lost 0.2% and the Taiwan dollar shed 0.6%. The South Korean won weakened to 1,346.90 per US dollar, its lowest since mid-October.
Analysts at MUFG said the won continues to be underpinned by favourable macroeconomic conditions, though persistent foreign selling of equities has diluted support for the currency.
South Korean shares .KS11 rose 2.2%, with dip-buying in technology stocks helping the market look past the AI-driven selloff on Wall Street on Friday after weak results from Intel and Amazon. Data showed South Korean exports nearly doubled in October, marking their sharpest increase in more than five decades, as strong global demand for AI investment boosted chip shipments.
Singapore's benchmark stock index .STI slid 1.4%, weighed down by banking stocks ahead of earnings from DBS DBSM.SI and OCBC OCBC.SI, bringing losses from its early-September record high to nearly 10%.
In Indonesia, stocks .JKSE fell as much as 1.5% before reversing course to trade up 0.9%, with investors awaiting inflation and third-quarter economic growth data due later this week.
The rupiah weakened to 18,165 per US dollar, hovering not far above the record low of 18,190 touched in early June.
Sentiment towards Indonesian assets has yet to recover from MSCI's warning of a potential market reclassification, with Jakarta equities among the world's worst performers this year and regulators racing to implement reforms sought by investors.
Analysts at MUFG said risks to the rupiah remain elevated due to still-elevated US yields, the impact of higher oil prices on Indonesia's trade and fiscal positions, and continued portfolio outflows, rather than inflation alone.
Investors are set to parse a wave of inflation readings from across Asia this week, including data from Thailand, the Philippines, Indonesia, South Korea and Taiwan.
The Thai baht was little changed while stocks .SETI inched 0.1% higher. The Bank of Thailand kept rates on hold in late October, saying growth remained below potential even as price pressures stayed contained.
The Philippine peso added 0.1%, while equity markets .PSI were closed for a public holiday. Concerns over the country's external balances have lingered since September trade data showed a wider deficit, keeping investors focused on upcoming inflation data.
In Malaysia, the ringgit weakened to 4.065 per US dollar ahead of Bank Negara Malaysia's policy meeting on Thursday, where markets expect the central bank to keep its benchmark rate at 2.75% amid contained inflation and resilient growth.
Investors will look for clues on how policymakers assess the inflation outlook after the Malaysian government's expansionary 2027 budget, which included higher minimum wages, cash transfers and tax relief measures.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields at 7.644%
** RBA to raise rates to 4.85% on November 3 in further effort to curb stubborn inflation
** South Korea's Lee vows to make bold AI investment in record budget push
Asia stock indexes and currencies at 0331 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | -0.24 | -0.80 | .N225 | -0.31 | 25.34 | |
China | +0.11 | +5.10 | .SSEC | 0.89 | -8.52 | |
India | +0.07 | -5.28 | .NSEI | 0.00 | -11.77 | |
Indonesia | -0.25 | -8.23 | .JKSE | 0.66 | -41.13 | |
Malaysia | -0.27 | -0.22 | .KLSE | 0.39 | -3.46 | |
Philippines | +0.08 | -7.54 | .PSI | - | -6.16 | |
S.Korea | -0.93 | +6.99 | .KS11 | 2.20 | 38.98 | |
Singapore | -0.15 | +0.47 | .STI | -1.47 | 14.03 | |
Taiwan | -0.62 | -3.80 | .TWII | -0.53 | 55.27 | |
Thailand | +0.00 | -6.87 | .SETI | 0.10 | 20.68 | |