BENGALURU: Most equities in emerging Asia rose on Tuesday with shares in Singapore clocking solid gains, while currencies traded largely steady after US Federal Reserve policymakers signalled three rate cuts this year although the timing remained uncertain.
Singapore’s benchmark, one of the worst-performing index in the region so far this year, advanced 0.9% with banking stocks among the top boosts in the index. DBS Group, Southeast Asia’s biggest bank by assets, jumped up to 1.4% to highest level since February 2022.
South Korea’s benchmark index surged 0.8% to their highest level since February 2022, while shares in Taiwan fell 0.6%.
Philippine stocks dipped 0.7% to a two-week low. The country, one of Asia’s most active issuers of sovereign debt, announced plans to raise as much as 585 billion Philippine pesos ($10.4 billion) from treasury bills and bonds in the second quarter
New quarterly economic projections showed nine of the Federal Reserve’s 19 policymakers see three quarter-point rate cuts this year.
Investors, however, are worried that the key US inflation gauge - core personal consumption expenditure (PCE) price index - due on Friday could derail the outlook for lower US rates.
“The core PCE is probably the most important US data this week which will determine upcoming Fed rate decision,” Poon Panichpibool, market strategist at Krung Thai Bank said.
In currency markets, the South Korean won edged up 0.1%. The Taiwanese dollar and Thai baht slipped 0.2% and 0.1%, respectively.
China’s yuan fell 0.1% to 7.218 per US dollar, above the psychologically important 7.2-per-dollar level.
“I anticipate that USD/CNY could drift back towards the low 7.30s gradually over time. The PBOC needs to accommodate renewed US dollar strength, but it will also continue to lean against volatility and ensure that FX moves are orderly,” said Alvin Tan, who heads Asia FX strategy at RBC Capital Markets.
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