* Singapore’s second-quarter GDP falls Q/Q * Fed Chair Powell’s speech is awaited * Vietnam stocks fall due to pandemic fears
Shashwat Awasthi is the author of this article.
14 JULY (Reuters) – After U.S. inflation statistics raised fears of an earlier-than-expected policy tightening by the Federal Reserve, Singapore stocks lost tiny early gains and most other developing Asian markets and currencies fell on Wednesday.
The dollar strengthened as overnight data revealed that consumer prices in the United States rose by the greatest in 13 years in June, making investors nervous about the Fed’s ability to quickly withdraw policy support.
The won in South Korea fell 0.5 percent, while the rupiah in Indonesia, the ringgit in Malaysia, and the peso in the Philippines all down 0.2 percent.
Jakarta’s stock market fell 0.8 percent, leading the region’s losses.
“This backdrop of higher for longer US inflation, a faster raising Fed, and a stronger USD is not a healthy formula for emerging Asia,” said Robert Carnell, ING’s Asia-Pacific regional head of research.
“…As the backdrop becomes less favourable, we may have to cope with a broad-based EM souring in both bond and FX markets as we approach the end of the year.”
Rising inflation has been labeled “transitory” by the Fed thus far, and all eyes are now on Fed Chair Jerome Powell’s speech before Congress this week for more information on the bank’s attitude.
SINGAPORE HAS BEEN SUBDUED
The Singapore dollar was marginally weaker, and the FTSE Strait Times Index dipped lower after climbing as high as 0.3 percent.
According to preliminary figures, the city-GDP state’s increased 14.3% annually, the fastest in well over a decade, but dropped 2% on a quarter-to-quarter seasonally adjusted basis.
In a note, Mizuho analysts warned that the yearly increase “is not a glamour picture of roaring, unrestrained recovery but rather glimmers of nascent pick-up extending,” but that COVID-19 variations and the Fed’s probable policy adjustment pose concerns.
“A rough road out of the pandemic could last considerably longer than most people imagine. The first signs of a more stable recovery will most likely appear in 2022.”
Vietnamese stocks, which have lost more than 7% this month due to a record surge of COVID-19 infections, have given up early gains and lost another 1.6 percent.
HIGHLIGHTS ** Singapore’s 10-year benchmark rate is now 1.499 percent, up 2 basis points.
* The top index gainers in the Philippines include Emperador, which is up 3.5 percent, JG Summit Holdings, which is up 2.7 percent, and SM Investments, which is up 2 percent.
* The biggest index losers in Indonesia include Sekar Bumi, which is down 7%, Bank Sinarmas, which is down 7%, and Solusi Sinergi Digital, which is down 6.9%.
At 0614 GMT, Asian stock indices and currencies were trading.
COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD percent X S S YTD percent DAILY percent percent COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD percent X S S YTD percent DAILY percent percent
+0.12 -6.55.N2 -0.23 4.40 25> Japan +0.12 -6.55.N2 -0.23 4.40 25>
CNY=CFX -0.07 +0.85.SS -0.59 2.08 S> China CNY=CFX -0.07 +0.85 EC>
India -0.10 -2.01.NS 0.13 13.24 EI> India -0.10 -2.01.NS 0.13 13.24 EI>
.JK -0.84 -0.29 ia SE> Indones -0.19 -3.11 Indones -0.19 -3.11 Indones -3.11 Indones -3.11 Indones -3.11 Indones -3.11 Indones
.KL -0.20 -6.80 a SE> Malaysi -0.19 -4.26 Malaysi -0.19 -4.26 Malaysi -0.19 -4.26 Malaysi -0.19 -4.26 Malaysi
Philipp -0.34 -4.44.PS 0.59 -4.26 ines I> Philipp -0.34 -4.44 ines I> Philipp -0.34 -4.44 ines I> Philipp -0.34
.KS -0.28 13.53 C> 11> S.Korea KRW=KFT -0.37 -5.52 S.Korea KRW=KFT -0.37 -5.52 S.Korea KRW=KFT -0.37 -5.52 S.Korea KR
Singapo -0.01 -2.53.ST -0.18 11.16 re I> Singapo -0.01 -2.53.ST -0.18 11.16 re I> Singapo -0.01 -2.53
Taiwan +0.03 +1.76.TW -0.01 21.13 II> Taiwan +0.03 +1.76
+0.00 -8.18.SE -0.47 7.89 d TI> Thailan +0.00 -8.18.SE -0.47 7.89 d TI> Thailan +0.00 -8.18.SE -0.4
(Shashwat Awasthi contributed reporting, and Shailesh Kuber edited the piece.)/n
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