BENGALURU: Most emerging Asian currencies inched up as the dollar steadied on Wednesday and stocks were largely mixed, while Indian stocks were volatile as investors digested an unexpectedly narrow election win for Prime Minister Narendra Modi’s alliance.

The Nifty index was last up 2% having swung between gains and losses in early trading.

The scenario of Modi’s Bharatiya Janata Party (BJP) needing to depend on regional parties, whose political loyalties have wavered over the years, to form the government raised concerns over economic policies, worrying investors.

“The election outcome poses near-term uncertainty but is unlikely to alter the economy’s path,” DBS analysts wrote in a note.

“Consolidation might return in the near-term as government and cabinet formation looms in the background,” they said, adding that political developments are not expected to sway the monetary policy direction or outlook for the country.

Elsewhere in Asia, the Malaysian ringgit, the Thai baht and the Taiwanese dollar edged up 0.1% each.

The South Korean won advanced 0.4% and was set for its best day in nearly two weeks.

Official statistics released on Tuesday showed the country’s consumer inflation fell in May for the second consecutive month to a 10-month low, coming in lower than market expectations.

Shares in Seoul rose 1.2% to their highest since May 29, propelled by heavyweight chipmaker Samsung Electronics after remarks by Nvidia’s CEO allayed investor concerns about its processors lagging behind competitors.

The Philippine peso rose 0.1%, while equities in the region were up 0.4%, after data showed that Philippine annual inflation quickened for a fourth straight month in May.

The Bangko Sentral ng Pilipinas (BSP) said the data was consistent with its expectations that inflation could accelerate over the near term.

On Tuesday, BSP Governor Eli Remolona had reiterated that the benchmark policy rate, currently at a 17-year high of 6.50%, could be cut before the US Federal Reserve starts it easing cycle.

Other regional stock markets also rose. Shares in Bangkok rose 0.3%, while those in Taiwan and Singapore rose 0.6% and 0.3%, respectively.

Bets on an interest rate cut in September by the US Federal Reserve firmed after data showed US job openings fell more than expected in April to the lowest level in more than three years, a sign that labour market conditions are softening.

Global investors are now looking out for the European Central Bank’s policy decision on Thursday and for monthly US payroll figures due on Friday.