Malaysian shares fell to a more than six-month low as the country grappled with a record number of COVID-19 deaths and infections, with the ringgit also touching a 1-1/2-month low even as other regional currencies gained on a weaker dollar.
The softer dollar trading around recent lows provided some respite to investors that have largely adopted a cautious view, on rising infections in the region and the eventual prospect that the US Federal Reserve tapers stimulus.
Stocks in Kuala Lumpur were heading for their worst week since late January, as the country reported a third day this week of a record number of COVID-19 infections and deaths on Thursday. The ringgit recovered into the session, gaining 0.1 percent.
Indonesia’s rupiah which backs some of emerging markets’ highest-yielding debt, edged higher but it was set for its worst week in three months.
“Asia is decidedly more subdued as caution rather than exuberance rules,” said Jeffrey Halley, senior market analyst for Asia Pacific at OANDA.
In China, the Shanghai composite index fell 0.5 percent, while blue-chips were down close to 1 percent.
The world’s second-largest economy and one of the top consumers of commodities earlier this week said, it will curb “unreasonable” increases in commodity prices.
“China’s inflation situation is strikingly at odds with the much-discussed US situation,” Alvin Tan, RBC Capital Markets’ head of Asia FX Strategy, said in a client note.
“Can there be a global inflationary cycle without Chinese inflation?” – Reuters
