Most emerging Asia stock markets eked out gains on Tuesday as expectations for US economic stimulus broadly supported global appetite for riskier assets, though fresh concerns about the coronavirus pandemic capped sentiment.
Philippine equities and other financial markets did not trade yesterday due to a holiday.
Stock markets in Singapore, Malaysia and Indonesia gained up to 0.2 percent following a mixed Wall Street session as concerns over record case numbers in California weighed on sentiment.
Markets are also closely watching for developments in Washington where lawmakers are due to vote this week on a stopgap funding bill to provide more time for them to reach a deal on a bigger COVID-19 relief package.
“On any other day, we could have had this news flow and still pushed higher in risk, so this selective mindset is just the market sitting on its hands waiting for the next shoe to drop,” said Chris Weston, head of research at Melbourne brokerage Pepperstone.
Meanwhile, South Korea’s stock index slumped 0.9 percent after five session of gains, while the won slipped as authorities there warned that total coronavirus cases could spike to 900 next week which could “collapse” the country’s health system.
However, the government on early Tuesday said it had signed deals with four companies to provide coronavirus vaccines for 44 million people.
In the Asian currency markets, most units firmed against a subdued greenback, with Taiwan’s dollar gaining 1 percent.
Possible US fiscal stimulus and promising vaccine updates recently have raised hopes for an economic recovery next year, which has kept the dollar in check.
Analysts at ING expect the safe-haven currency to weaken by 5 percent-10 percent in 2021 against most units.
“In Asia, we expect a continuation of gains of those currencies with large weights in emerging market benchmark indices — the yuan, won and the Taiwanese dollar,” they added.
The baht firmed just 0.1 percent ahead of a Bank of Thailand briefing on Wednesday where it will unveil measures to contain the currency’s appreciation.
The dollar slid against most currencies as investors eyed potential stimulus and vaccine development. An index that tracks the dollar against a basket of currencies was little changed at 90.889, not far from 90.471, its weakest since April 2018.
Sterling clung to hopes of a meeting between British Prime Minister Boris Johnston and European Commission President Ursula von der Leyen salvaging a Brexit trade deal.
The British currency was on edge but holding on at $1.3351 in the Asia morning session, well above Monday’s low of $1.3225.
The yield on the benchmark 10-year notes rose slightly to 0.9327 percent on Tuesday.
Spot gold prices were 0.06 percent higher at $1,864.91 per ounce, and US gold futures settled up 0.25 percent at $1,870.6, as investors bet on more stimulus money being pumped into the financial system.
