Most Asian stocks weaken as searing US inflation fuels fears of a rate hike

  • Risk appetite weakens after US inflation surge
  • South Korean Won Leads Currency Decline
  • Singapore long-term bond yield jumps 31 basis points

March 11 (Reuters) – Several emerging Asian stocks fell on Friday after searing U.S. inflation figures cemented expectations of more aggressive rate hikes globally, while talks between Russia and Ukraine have not made much progress in de-escalating tensions.

Equity markets in Malaysia (.KLSE) plunged more than 1%, while those in the Philippines (.PSI) and South Korea (.KS11) also lost ground.

Thai stocks (.SETI), however, avoided the blows, with analysts saying its central bank may not raise rates any time soon despite a recent inflation spike, due to risks to its tourism sector and his growth. Read more

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Thursday’s data showed US inflation saw its biggest increase in 40 years in February, prompting bets the Federal Reserve would seek to aggressively raise interest rates and regional central banks could follow suit. step to fight price pressures.

A hawkish political view was bolstered by the European Central Bank, which said on Thursday it would stop pumping money into financial markets this summer, paving the way for interest rates to rise. Read more

Geopolitics also did nothing to brighten the mood, as the lack of a successful outcome in diplomatic talks between Ukraine and Russia to resolve their dispute, which Russia calls a “special operation”, has hurt the feeling. Read more

“Peace talks haven’t yielded much results, US CPI shows no signs of backing down, and we’re heading into the weekend break as Russian attacks continue,” Yeap Jun Rong said. market strategist at IG.

“The ever-changing dynamics and largely unpredictable nature of the dispute may cause some market participants to refrain from buying over the weekend.”

Most regional currencies sold off, with the Korean won and Thai baht leading the fall, even as oil prices fell for a second straight session. Analysts warned this week that market volatility could persist in the near term.

A poll on Thursday showed investors raised their bearish view on most Asian currencies as Russia’s invasion of Ukraine inflated commodity prices and stoked inflation fears. Read more

Shares in China (.SSEC), which fell more than 2% earlier on delisting risks from some U.S. companies, reversed course to trade 0.4% higher after its Prime Minister pledged increased political support and backed the country to hit its economic growth target this year. Read more

STRONG POINTS:

** Major losers in the Jakarta Stock Index (.JKSE) include Midi Utama Indonesia Tbk PT (MIDI.JK) down 6.97% and Indo Straits Tbk PT (PTIS.JK) down 6.86 %

** Major losers in the FTSE Bursa Malaysia Kl Index (.KLSE) include Top Glove Corporation Bhd down 2.92% and Hartalega Holdings Bhd (HTHB.KL) down 2.29%

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Reporting by Riya Sharma; Editing by Anil D’Silva

Our standards: The Thomson Reuters Trust Principles.

Garland K. Long