Asian FX, stocks climb as Wall St record douses Omicron worries

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Emerging Asia’s stocks and currencies

gained on Tuesday as year-end sentiment got a boost from Wall

Street’s record highs overnight, eclipsing underlying worries

over the Omicron variant of the coronavirus.

India, Taiwan and Indonesia shares

were among the biggest gainers, up between 0.5% and 0.7%, while

most Asian currencies advanced around 0.1%, except for the

rupiah, which eased 0.1%.

Trading was characterized by holiday-thinned volumes in the

last week of 2021 ahead of the New Year.

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Investors appeared to be guardedly optimistic that the

global recovery would regain steam next year even though the

emergence of the highly-transmissible Omicron variant has

prompted border closures and mobility restrictions in most

countries once again.

“A rally in most Asia’s EM currencies could be attributed to

the risk-friendly sentiment,” said Gao Qi, FX strategist at

Scotiabank.

“Global stock prices advanced overnight as the Omicron

variant’s impact was considered less severe.”

Several reports have indicated that the Omicron variant

caused milder symptoms and carried a lower risk of

hospitalization than the Delta strain of the coronavirus.

However, China remained a cause for worry after it reported

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209 new confirmed coronavirus cases for Dec. 27, up from 200 a

day earlier, mostly in the northwestern province of Shaanxi,

where Xian, the provincial capital, is in lockdown.

Shanghai stocks slipped 0.2%, while the yuan

traded flat.

The Indonesian rupiah weakened 0.1% to 14,237 per

dollar for its worst trading day in more than a week.

Scotiabank’s Gao attributed the rupiah’s fall to a

technical correction after it was overbought following around a

1% gain in the past two weeks.

In Malaysia, stocks were steady after data showed

exports for the month of November surged 32% as shipments to the

United States continued to grow.

Elsewhere, consumer stocks dominated gains on the Singapore

and Philippine benchmark indexes, while higher oil

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prices boosted energy stocks on the Thai bourse, up

0.7%.

HIGHLIGHTS

** Gains on Malaysia’s benchmark stock index led by

oil-related services and equipment provider Dialog Group

** Top gainers on the Singapore STI: Dairy Farm

International Holdings Ltd, up 2.9%, and Venture Corp

, up 1.92%

** Indonesian 3-year benchmark yields are down 9.4 basis

points at 4.413%

Asia stock indexes and currencies

at 0420 GMT

COUNTRY FX RIC FX DAILY % FX YTD % INDEX STOCKS DAILY % STOCKS YTD %

Japan -0.01 -10.10 1.12 5.66

China +0.02 +2.45 -0.16 3.95

India +0.00 -2.57 0.76 23.13

Indonesia -0.07 -1.37 0.45 10.47

Malaysia -0.02 -3.87 0.27 -5.48

Philippines -0.08 -4.51 0.33 1.94

S.Korea +0.02 -8.46 0.11 4.51

Singapore +0.07 -2.58 0.54 9.74

Taiwan +0.16 +2.93 0.65 23.31

Thailand +0.09 -10.67 0.60 13.59

(Reporting by Anushka Trivedi in Bengaluru

Editing by Shri Navaratnam)