Asian stocks gain, tracking Wall Street peers; FX mixed

Tuesday,   04-Oct-2022   10:39 AM (IST)

Equities in emerging Asian markets advanced on Tuesday after weak manufacturing data in the United States spurred bets on a softer stance from the Federal Reserve over the coming months, with a subdued dollar lifting most regional currencies. Wall Street indexes finished more than 2% higher overnight as Treasury yields tumbled after manufacturing activity increased at its slowest pace in nearly 2-1/2 years, raising fears that the aggressive stance by the Fed might be starting to hurt overall demand. Also aiding overall sentiment was a u-turn in policy by British Prime Minister Liz Truss over her mini-budget announced last week containing massive tax cuts, which had resulted in a rout across global markets. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4% in a thin-volume trading session as markets in China and Hong Kong were on holiday. In Asia, South Korea's share index was the top gainer for the day, rising about 2.4%, led by advances in heavyweight chipmakers such as Samsung Electronics and peer SK Hynix. Other indexes in the region such as the Philippines, Indonesia, Singapore and Taiwan also rose, with gains ranging from 0.6% to 2.2%. Investors are now directing their focus towards U.S. non-farm payrolls data due later this week and key inflation data next week, which could indicate the trajectory of rate hikes by the nation's central bank. Among Asian currencies, the South Korean won led the laggards for the day dropping about 0.3%, while the Singapore dollar and Philippines Peso traded almost flat. The Thai baht pared its early losses to trade as much as 0.3% higher after the central bank chief said that economic recovery was likely intact and inflation should ease the following year. The tourism-reliant economy is set to reveal its September inflation print on Wednesday, which could provide further indications on the Bank of Thailand's monetary stance moving forward. The Indonesian rupiah gained 0.2%, a day after data showed an acceleration in inflation for the previous month, even though it had missed market expectations of a 6% rise.