Most Asian emerging stocks and currencies eked out modest gains on Friday, steadying as signs overnight of moves to deliver more US fiscal stimulus calmed some of the worst bouts of selling on global stock markets in months.
Wall Street had closed higher on signs that Democrats in the House of Representatives were working on a $2.2 trillion coronavirus stimulus package that could be voted on next week.
“Today is largely consolidative after consecutive days of decline,” said Christopher Wong, senior FX strategist at Maybank in Singapore.
India and Indonesia were the best performers with gains of more than 1 percent in morning trade. Jakarta’s main index, weighed down a new wave of coronavirus infections and concerns over moves to change its central bank law, had shed more than 4 percent this week.
Other Asian equity markets made more modest gains, with the Philippines, Malaysia and South Korea adding between 0.4 percent to 0.8 percent, and were still set to register heavy losses for the week.
South Korea’s KOS PI was down 5.2 percent for the week, its worst performance since March.
Concerns about a second round of COVID- 19 infections that is spreading across Europe and weak economic indicators have made markets bearish this week.
“The increasingly worrying ‘second round’ COVID risks, which have showed up in Services PMIs in Europe, point to a sputtering and uneven recovery without appropriate and timely policy intervention,” Mizuho Bank’s Riki Ogawa said.
In China, a strong influence over many of the region’s markets, the yuan rose 0.2 percent after news that China’s government bonds would be included in FTSE Russell’s flagship World Government Bond Index (WGBI).
Once included, China’s market yield will be the second highest in the FTSE WGBI index based on current prices, bringing in inflows of about US$140 billion, Goldman Sachs analysts said.