Asian stocks were mostly flat to marginally higher on Monday as a fresh COVID-19 outbreak in China added to worries about slowing growth in the world’s second-biggest economy, while the Thai baht advanced on a revival in the country’s tourism sector.
Philippine stocks .PSI fell 1% to lead losses, followed by Thailand .SETI, while equities in Singapore .STI, Taiwan .TWII and Malaysia .KLSE traded flat to slightly higher.
China, already struggling with a power crunch and crisis in its real-estate sector, on Sunday warned that its latest COVID-19 outbreak – across 11 provinces – was likely to spread further, with authorities discouraging travel in an attempt to contain it.
Market watchers worried that new curbs could be imposed in the country, which could see economic growth and trade with its Asian partners slow. The Chinese yuan CNY=CFXS opened 0.1% weaker on the news, but later recouped those losses.
There could be “aggressive measures to control virus spreads,” Yeap Jun Rong, market strategist at retail trading platform IG said, adding “which may put a cap on growth, thereby potentially putting risk appetite in the region on hold over the coming days.”
Meanwhile, the Indonesian rupiah IDR= dropped 0.4% to a nearly two-week low as the coal exporter’s currency continued to suffer from tumbling prices of the commodity.
Singapore’s dollar SGD= and the South Korean won KRW=KFTC firmed 0.2% and 0.7%, respectively, while most other Asian currencies were tepid.
The South Korean won and stocks .KS11 rose as corporate blue-chip earnings in the country rolled in, with investors shifting focus to third-quarter gross domestic product data due on Tuesday.
The Thai baht THB=TH rallied 0.8% to hit its highest since Sept. 16 after the trade- and tourism-reliant economy announced rules for its quarantine-free reopening to visitors from 45 countries.
Yield on the 10-year government bonds in the country fell 8 basis points to 1.98%.
This comes after confidence in the Thai economy had waned due to collapse of its tourism sector as exports also struggled after the pandemic, with the baht becoming Asia’s worst-performing currency this year.
HIGHLIGHTS
** Singapore’s 10-year benchmark yield is down 1 basis points at 1.752%
** In the Philippines, top index losers are Ayala Land Inc ALI.PS, down 4.1%, and Aboitiz Equity Ventures Inc AEV.PS, down 2.5%
** South Korea Q3 GDP expected to have expanded by 0.6% from the previous quarter on robust exports.
Source: Reuters (Reporting by Anushka Trivedi in Bengaluru; Editing by Sherry Jacob-Phillips)