Asian stocks, currencies rise at recovery hopes and pull back US returns

BENGALURU (March 3): Asia’s emerging stock markets rose cautiously on Wednesday, led by China, as investors rebounded on a global economic recovery, while regional currencies fell higher as US government interest rates receded.

Shares in the Shanghai Composite Index climbed above 1% and picked up Tuesday’s losses, while Singapore’s stock index rose half a percent.

China will outline a five-year plan at its annual parliamentary session on Friday and set macroeconomic policy targets in addition to the Covid-19 pandemic. The world’s second largest economy has steadily recovered from the coronavirus shock.

“We expect these targets to fully or partially return to pre-pandemic standards and to be less restrictive than in the past,” said analysts at Goldman Sachs, noting that the policy would have significant implications for the rest of Asia.

Regional currencies rose higher as lower US interest rates reduced some demand for the US dollar. The ringgit gained 0.2% while the rupee advanced by 0.1%.

Indonesia will hold an auction of greenchoe options on Wednesday after Tuesday’s bond sales raised 17 billion rupees below target ($ 1.19 billion). The weighted average returns on the bonds sold were higher than the comparable bonds sold at the previous auction in mid-February.

“If there is still no reversal in sentiment, the government may need to accept higher bid returns or cut back on planned spending,” the OCBC said in a note.

Thai stocks climbed above 1%, led by technology and consumer stocks. PTT PCL led energy inventories higher when oil prices rose, reversing previous losses.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, will meet on Thursday to discuss production and demand, and markets expect to announce that they will facilitate production cuts.

Highlights:

  • Indonesian 10-year benchmark yields 2.19 basis points to 6.607%
  • Top profits at Singapore STI include top bank DBS Group Holdings Ltd, which rose 1.6%