Asian shares rally to hit multi-week highs
Dollar clings on to gains from US-China pact
Malaysian ringgit extends losses for sixth session
By Roushni Nair
May 13 (Reuters) - Most Asian equities rallied to multi-week highs on Tuesday and currencies eked out marginal gains, as markets welcomed a surprisingly cooperative tone in U.S.-China tariff negotiations, raising hopes that global trade tensions may be easing.
Malaysian shares .KLSE jumped 2.1% to their highest since March 3, while the Philippine stocks .PSI gained 1.6% to their highest since January 8. Taiwanese equities .TWII climbed more than 2% to their highest since March 28, and the Thai market .SETI rose 1.7% to touch late-February peaks.
"U.S.-China trade de-escalation is deeper and faster than widely expected and will serve as a positive near-term catalyst for risk assets," said Eli Lee, chief investment strategist at Bank of Singapore.
The weekend agreement in Geneva exceeded market expectations, with both sides committing to unwind most tariffs imposed since early April on Monday.
The U.S. is dropping the extra tariffs it imposed on China this year to 30% from 145%, while China is cutting them to 10% from 125%.
Most regional currencies made modest gains, with the Philippine peso PHP= and Singapore dollar SGD= adding 0.2%, each, matched by similar advances in the Chinese yuan CNY=CFXS and Thai baht THB=TH.
The dollar index =USD remained firm after Monday's broad gains, supported by receding U.S. recession fears following the U.S.-China trade pact that reduced expectations for near-term Federal Reserve interest rate cuts. USD/
Markets in Thailand, Malaysia, Philippines, Indonesia and Singapore reopened on Tuesday after Monday's Vesak Day holiday.
The Malaysian ringgit MYR= bucked the regional trend, sliding as much as 1% to its weakest level since April 29, extending losses for a sixth consecutive session.
The currency has weakened since the country's central bank held interest rates steady Thursday and flagged risks of slower economic growth, prompting analysts to forecast potential rate cuts later this year.
The Indian rupee INR=IN strengthened as much as 0.9% in its best session in two weeks after a tenuous ceasefire halted four days of unprecedented military exchanges between nuclear powers India and Pakistan that had killed dozens.
Indian stocks .NSEI fell 0.8% early Tuesday. Pakistan's market .KSE rose 2.4% to their highest since early April, after surging 9.4% on Monday following the ceasefire announcement.
Investor focus now shifts to the implementation details of the U.S.-China agreement and what happens after its 90-day timeframe.
More immediately, markets await U.S. inflation data due later in the day, with analysts noting some goods are likely to show higher prices due to the tariffs.
HIGHLIGHTS:
** Markets in Indonesia are closed for a holiday.
** Malaysia imposes anti-dumping duties on Asian Steel
** Pakistan FM: conflict with India won't have large fiscal impact
Asian stocks and currencies as of 0729 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.39 | +6.30 | .N225 | 1.86 | -2.45 |
China | CNY=CFXS | +0.22 | +1.50 | .SSEC | 0.07 | 0.60 |
India | INR=IN | +0.85 | +1.14 | .NSEI | 0.00 | 5.41 |
Indonesia | IDR= | +0.00 | -2.54 | .JKSE | 0.07 | -3.49 |
Malaysia | MYR= | -0.74 | +3.28 | .KLSE | 2.09 | -3.87 |
Philippines | PHP= | +0.22 | +4.33 | .PSI | 1.53 | 0.43 |
S.Korea | KRW=KFTC | -0.06 | +3.84 | .KS11 | 0.06 | 8.72 |
Singapore | SGD= | +0.16 | +4.72 | .STI | 0.28 | 2.62 |
Taiwan | TWD=TP | -0.28 | +7.83 | .TWII | 1.14 | -7.23 |
Thailand | THB=TH | +0.36 | +2.88 | .SETI | 0.93 | -12.71 |
(Reporting by Roushni Nair in Bengaluru; Editing by Rashmi Aich)
((Roushni.Nair@thomsonreuters.com))
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