Thai equities at 5-month high; other Asian peers subdued on slowdown concerns
Thai stocks rise nearly 3%, baht up 1%
Malaysia c.bank maintains interest rate
Inflation in the Philippines eases to 7-month low
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By Sameer Manekar and Roshan Thomas
Sept 5 (Reuters) -Thai equities jumped roughly 3% on Thursday to hit a near five-month high, while the baht appreciated to its best level since May last year, as a stabilising political environment and measures taken to boost capital flows improved risk appetite.
Stock markets elsewhere in emerging Asia were largely subdued as investors looked for clues on the health of the U.S. economy and the labour market, with recent soft economic data prompting traders to raise their bets of the Federal Reserve delivering a bigger rate cut.
The market is now pricing in a 45% chance of a half-point rate cut by the Fed on Sept. 18, up from 38% a day ago, with 110 basis points of easing expected over the remaining three meetings this year, CME's FedWatch tool showed.
"While the magnitude of a rate cut continues to be a key concern, growth and the probability of a recession will also be an ultimate consideration," analysts at Maybank said, referring to the Fed's expected easing and the U.S. economy.
Malaysia's equities .KLSE and ringgit MYR= were largely flat after the central bank held its key interest rate, as widely expected.
In Thailand, the benchmark index .SETI jumped as much as 3% to its highest level since mid-April. The baht THB=TH also appreciated around 1% to its highest since mid-May last year.
Recent developments including Thailand's king endorsing the prime minister's new cabinet have calmed traders' nerves after a politically charged volatility in August.
Poon Panichpibool, a markets strategist at Krung Thai Bank, also pointed to the state investment fund's - Vayupak Fund - raising of up to 150 billion baht ($4.45 billion) to help boost the inflows as a factor in improving investor confidence.
"Some optimism about incoming Vayupak Fund could be one of the factors that drive Thai equity market today," Panichpibool said.
"It remains to be seen how foreign investors will react to recent developments on Thai politics as well as the Vayupak Fund amid somewhat risk-off sentiments in the global market."
Tanawat Ruenbanterng, head of institutional research at Tisco Securities, said in a note, "Vayupak Fund 1 will draw interest from fixed-income investors ... this new money will brighten overall sentiment in the market, pushing up the SET by about 15-20ppt for every 10 billion baht net buy, in our estimate."
Global traders will also be looking at U.S. services industry and jobless claims data later in the global day, with the main event being the U.S. payrolls data on Friday to try and gauge what the Fed is likely to do.
Chris Weston, head of research at broker Pepperstone, said a "poor" non-farm payrolls report could result in an even chance of a 50-basis-point reduction, attracting more dollar sellers "across the FX landscape".
Among Asian currencies, the Taiwan dollar TWD=TP, the Philippine peso PHP=, and the Indonesian rupiah IDR= gained between 0.3% and 0.5%.
Stock markets in Singapore .STI, the Philippines .PSI, Indonesia .JKSE, and Taiwan .TWII gained between 0.2% and 0.5%.
HIGHLIGHTS:
** Thai headline inflation slows in August, still below c.bank target
** Philippine c.bank sees downside risk for inflation outlook in 2024, 2025
** Malaysia will not stop South China Sea exploration despite China protests, PM says
Asian stock indexes and currencies as at 0746 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.06 | -1.80 | .N225 | -1.05 | 9.54 |
China | CNY=CFXS | +0.15 | -0.06 | .SSEC | 0.14 | -6.27 |
India | INR=IN | -0.02 | -0.92 | .NSEI | -0.06 | 15.89 |
Indonesia | IDR= | +0.49 | +0.00 | .JKSE | 0.40 | 5.92 |
Malaysia | MYR= | +0.39 | +5.93 | .KLSE | -0.25 | 14.53 |
Philippines | PHP= | +0.34 | -1.51 | .PSI | 0.38 | 7.10 |
S.Korea | KRW=KFTC | -0.05 | -3.64 | .KS11 | -0.21 | -3.00 |
Singapore | SGD= | +0.12 | +1.31 | .STI | 0.21 | 6.43 |
Taiwan | TWD=TP | +0.36 | -4.17 | .TWII | 0.45 | 18.16 |
Thailand | THB=TH | +0.95 | +1.35 | .SETI | 2.54 | -1.11 |
($1 = 33.7300 baht)
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Sameer Manekar and Roshan Thomas in Bengaluru; Editing by Shri Navaratnam and Sherry Jacob-Phillips
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