Most Southeast Asian stock markets ended higher on Friday after China and the United States agreed to hold their first trade talks since June later this month and the Turkish lira extended its recovery from a record low hit earlier this week. A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet US representatives, China's Ministry of Commerce said, with the Wall Street Journal reporting that talks will take place in Washington on August 21 and 22.
This has sparked hopes that they might resolve an escalating tariff war that threatens to engulf all trade between the world's top two economies. They are due to slap tariffs on billions of dollars of each other's goods on August 23 in addition to levies that took effect on July 6. The lira has rebounded more than 20 percent from its record low on Monday.
The currency's collapse, prompted partly by heightened trade tensions between Turkey and the United States, had sparked an investor exodus from emerging markets and led to deep losses. In Southeast Asia, Philippine shares rose 0.9 percent, led by real estate and financial stocks, but fell 2.8 percent for the week. Real estate conglomerate Ayala Land climbed 2.7 percent on Friday, while financial counterpart Ayala Corp gained 6.7 percent.
The Philippine central bank said it was optimistic about inflation and that it was expected to ease after peaking either in August or September. Inflation had spiked to a more than five-year high in July, which bodes poorly for price stability as well as the peso.
Malaysian shares were unfazed by weaker-than-expected second-quarter economic growth data and a cut in full-year GDP forecast. They closed about 0.4 percent higher with telcos and industrial stocks leading the gains. Meanwhile, the central bank relaxed currency conversion rules for exporters and said it would allow companies more flexibility for hedging of foreign currency obligations.
The country is one of the largest exporters of palm oil in the world. Malaysian stocks fell 1.2 percent this week.
Vietnam stocks gained 0.5 percent on Friday and managed to eke out a small gain for the week, making them the sole weekly gainers in Southeast Asia. Singapore stocks gave up early gains to end flat, as lagging industrials negated gains across financial and consumer discretionary stocks.
"Trading volumes in the local market are really low, and I think that's causing some volatility... Overall there's still a risk-off sentiment in the market and that's been exacerbated by lower volumes," said Joel Ng, an analyst with KGI Securities. Indonesian markets were closed for a public holiday.
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