EMERGING MARKETS-Asian stocks hit by inflation worries, Singapore and Malaysia outperform

Mar 9, 2021

 

 * Singapore shares rise 2% to hit more than one-year high 
    * Jardine Strategic, Jardine Matheson boost Singapore shares
    * Petronas Chemicals Group top gainer in Malaysia

    March 8 (Reuters) - Asian shares broadly reversed course to
trade lower on Monday as higher oil prices raised inflation
worries and offset optimism over the passage of a $1.9 trillion
U.S. stimulus bill, while Singapore and Malaysian stocks rose on
local corporate news.
    Equity markets in China and the Philippines
fell more than 1.5%, while in South Korea they were
about 1% lower. 
    Earlier on Monday, Asian shares were broadly higher after
the mammoth U.S. stimulus bill cleared the Senate over the
weekend, boosting optimism about the global economic
recovery.
    A spike in oil prices past $70 for the first time since the
pandemic, though, sparked some worries about inflation for
energy-hungry Asia.
    Broadly, rising prices had already been on investors' minds,
pushing U.S. bond yields higher and keeping pressure on Asia's
bond markets and equity valuations. 
    "The last thing anyone wants in a recovering global economy
is higher oil prices," said Stephen Innes, the chief global
markets strategist at axi.
    "We are likely nearing a point when higher oil prices become
a negative rather than a positive influence over risk assets via
the inflation throughput to higher yields." 
    The region's currencies came under pressure as the dollar
firmed on the back of stronger-than-expected jobs data and the
pandemic relief bill, on top of higher oil bills. South Korea's
won fell 0.6%.   
    On the other end, Singapore stocks jumped 2% to their
highest in more than a year, led by a rally in Jardine Strategic
 and Jardine Matheson, which climbed nearly
20% and 14%, respectively. 
    Jardine Matheson said it plans to buy the remaining 15% of
Jardine Strategic that it does not already own for about $5.5
billion to simplify the structure of the sprawling Asian
conglomerate that has a foot in construction to aviation.

    In Malaysia, shares jumped 1.5%, with Petronas
Chemicals Group the biggest gainer. The petrochemical
product maker jumped close to 10% after CGS-CIMB upgraded the
stock to "Add" and raised its price target.
    Indonesia's shares and the rupiah dipped. The
country is susceptible to higher U.S. yields given that the
Southeast Asian nation houses some of the highest-yield debt in
emerging markets. 
    The yield on Indonesia's 10-year bonds shot up
18.4 basis points to 6.809%. 
        
    HIGHLIGHTS:
    ** Indonesian 3-year benchmark yields up 12.1 basis points
to 5.561%
    ** Genting Malaysia, Genting Bhd were
among the top gainers in Malaysia
    ** In the Philippines, Bank of the Philippine Islands
 and BDO Unibank Inc fell the most 
  Asia stock indexes and currencies at   0636 GMT
 COUNTRY      FX RIC      FX       FX     INDEX    STOCKS   STOCKS
                          DAILY %  YTD %           DAILY %  YTD %
 Japan                    -0.07    -4.78           -0.42    4.73
 China                    -0.19    +0.30           -1.62    -0.80
 India                    +0.01    +0.08           0.52     7.40
 Indonesia                -0.21    -1.96           -0.26    4.40
 Malaysia                 -0.39    -1.66           1.45     -0.24
 Philippines              +0.14    -1.07           -1.81    -5.36
 S.Korea                  -0.63    -4.15           -1.00    4.27
 Singapore                -0.18    -1.78           2.00     8.10
 Taiwan                   +0.81    +1.54           -0.22    7.38
 Thailand                 -0.72    -2.47           0.79     7.38
 
    

 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Ana
Nicolaci da Costa and Subhranshu Sahu)

SOURCE : https://www.reuters.com/article/emerging-markets-asia/emerging-markets-asian-stocks-hit-by-inflation-worries-singapore-and-malaysia-outperform-idUSL4N2L61N4