Emerging Asian markets weakened as Chinese equities reversed a brief rally while Philippine shares sunk after the country imposed a lockdown in the capital region to contain spread of the Delta coronavirus variant.
Several regional equities, including China, Philippines and South Korea posted significant monthly drops, with severe coronavirus outbreaks and a brutal mainland selloff hurting sentiment.
Beijing’s announcement of new rules barring for-profit tutoring in core school subjects resulted in a significant rout in the country’s equity markets, and battered stocks in th education, property and tech sectors.
Reassurances from Chinese regulators appeared to have soothed investors’ nerves temporarily, but stocks in the country eyed their worst month since May, 2019.
“Despite the rebound led by Chinese stocks (yesterday), markets are still vigilant against more clampdowns in China and the hardening in US-China rivalry,” Philip Wee, FX Strategist at DBC said in a note.
Meanwhile, shares in Manila . sunk 3.5 percent to hit its lowest since late-may after President Rodrigo Duterte approved the imposition of lockdown measures in the Manila capital region. The lockdown is expected to cost the economy $4 billion. (Full Story)
The latest outbreak in Thailand has resulted in a slump in tourism amid stricter containment measures. The country’s finance ministry slashed its 2021 economic growth forecast on Thursday to 1.3 percent from a previously predicted 2.3 percent expansion.
“Continued threats from the elevated daily case counts and rising challenges to the healthcare system and Thailand’s sandbox tourism program could be weighing on sentiments,” said Maybank analysts.
Equities in the country were down 1.2 percent and on track to post their biggest monthly drop since September, 2020. The baht THB=TH was down 0.1 percent.
While the dollar languished near a one-month low following dovish remarks by the US Federal Reserve, weakness persisted in several currencies across the region, with the yuan trading relatively flat.
Taiwan’s statistics agency said that the island’s economy grew by a preliminary 7.47 percent in the second quarter of 2021 from the same period a year earlier, beating a Reuters poll estimate of 6.05 percent.
