EMERGING MARKETS-Peso retreats after surprise rate cut, virus fears grip Asian stocks

EMERGING MARKETS-Peso retreats after surprise rate cut, virus fears grip Asian stocks

Reuters  | Jun 25, 2020 17:00

EMERGING MARKETS-Peso retreats after surprise rate cut, virus fears grip Asian stocks

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA
* S. Korean shares worst hit in the region
* Philippines c.bank cuts interest rates by 50 basis points
* Indian shares set to extend declines

By Shriya Ramakrishnan
June 25 (Reuters) - Asian stock markets sold off heavily on
Thursday as fears of surging global coronavirus cases and fresh
trade tensions dented confidence, while the Philippine peso
retreated after a shock half point cut in interest rates.
The move by Bangko Sentral Pilipinas (BSP) was its fourth
this year, reducing headline rates to a new low and adding that
further cuts "would mitigate" risks to economic growth.
The peso PHP= , which gained as much as 0.2% earlier in the
day, fell back to trade flat at 50.05 per dollar after the
decision, while Philippine shares ended down 1.1% at a more than
three-week low.
"The surprise rate cut by the BSP will likely sap some
appreciation pressure for the peso in the near term," said
Nicholas Mapa, senior economist for the Philippines at ING,
while arguing it could be the last move this year.
The peso has appreciated 1.2% against the dollar so far in
2020 and even after four cuts in rates this year, with base
rates at 2.25%, the country's government bonds offer an
attractive premium to other emerging markets in the region.
The yield on the 10-year Philippines' debt PH10YT=RR stood
at around 3.42% after the decision, down 207 basis points from a
late-March high of 5.49%.
Stock markets of trade-sensitive economies across the region
took a hammering in morning trade as the International Monetary
Fund cut its forecasts for economic output this year and signs
of more global trade tensions overnight unnerved markets.
Singapore .STI , Thailand .SETI and South Korea .KS11
lost between 1.0% and 2.3%, while South Korea's won KRW=KFTC
fell about 0.4%.
Investors pushed funds into the dollar and other traditional
safe havens as the trade tensions and rising coronavirus cases
in India, Indonesia, the United States and parts of Europe
cooled hopes of a quick global economy recovery.
South Korean markets were further hit by the government's
proposal to widen capital gains taxes for retail investors.
Indian shares .NSEI were set to extend declines for a
second day after the IMF slashed its growth outlook for the
country, the fourth worst hit in the world by the novel
coronavirus, according to a Reuters tally.
Financial markets in China and Taiwan were closed for
holidays.

Asia stock indexes and
currencies at 0821 GMT
COUNTRY FX FX FX YTD INDEX STOCKS STOCK
RIC DAILY % % DAILY S YTD
% %
Japan .n225="" -1.22="" -5.90 >
India .nsei="" -0.36="" -15.6 IN> 2
Indonesi .jkse="" -1.37="" -22.2 a > 7
Malaysia .klse="" -0.72="" -6.10 >
Philippi .psi="" -1.14="" -21.7 nes > 1
S.Korea .ks11="" -2.27="" -3.88 KFTC>
Singapor .sti="" -1.88="" -19.9 e > 7
Thailand .seti="" -1.04="" -16.4 TH> 7

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (Australia) English (South Africa) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+

Download the Investing.com App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.

Investing.com is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.