BENGALURU: Most Asian stocks rose on Tuesday as traders positioned for a potential US Federal Reserve interest rate cut this month, though political uncertainties in Southeast Asia’s two largest economies kept risk sentiment in check.
Stocks in Indonesia, Southeast Asia’s biggest economy, rose 1.3 percent in their biggest intraday percentage gain in three weeks, climbing for the first time since thousands of demonstrators clashed with police outside the House of Representatives late last week.
The benchmark index had lost 1.6 percent by Monday’s close since widespread protests against controversial election law changes began a week ago.
Bank Indonesia’s interventions in the currency market helped the Jakarta Composite cut its losses, according to Philip Wee, a senior FX strategist at DBS. The rupiah traded almost flat on Tuesday, last up 0.1 percent.
“Still, investors are looking beyond rhetoric for policy credibility and reform momentum to anchor long-term capital,” he said.
South Korean shares rose 0.9 percent after data showed that consumer inflation slowed in August. The won strengthened 0.3 percent.
In Thailand, the region’s second-biggest economy, the baht
traded largely flat, last down 0.1 percent, and equities advanced 0.4 percent.
Thailand’s political crisis deepened after the Constitutional Court dismissed Prime Minister Paetongtarn Shinawatra on Friday for ethics violations.
The Thai Constitutional Court’s decision may have brought relief and closure, Wee said.
“This year, the THB has been less vulnerable to political premium pricing, cushioned by a persistent current account surplus, record foreign reserves, and broad-based USD weakness tied to Fed rate-cut expectations,” he said.
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