BENGALURU: Most emerging Asian stock markets rallied on Wednesday after US President Donald Trump’s comments raised hopes of a de-escalation in the Middle East war, while Indonesia’s rupiah slipped to a record low.
The rupiah weakened as much as 0.2 percent to breach the psychologically crucial level of 17,000 against the US dollar for the first time, heading for a fourth straight session of declines. The currency fell 1.4 percent in March in its worst month in more than a year.
“The rupiah remains vulnerable to global risk-off sentiment and market concerns about domestic fiscal risks – which have been compounded by higher energy prices that could lead to an increase in energy subsidies and compensation,” said MUFG senior currency analyst Lloyd Chan.
Indonesia was already grappling with investor concerns over its fiscal deficit, central bank autonomy, and a weak currency, before rising oil prices posed fresh problems for the import-dependent country.
Adding to the pressure, Moody’s and Fitch cut Indonesia’s credit outlook for this year over worries about policymaking, governance and fiscal health.
“We still expect the rupiah to trade around the 17,000 level against the US dollar, assuming the Iran conflict ends in Q2,” Chan said.
Most other Asian currencies firmed against a softer US dollar, with the South Korean won and the Philippine peso advancing 0.3 percent each.
The Malaysian ringgit appreciated 0.2 percent after a seven-day losing streak.
The US dollar index edged lower, extending losses after a 0.7 percent slide on Tuesday.
On the equity side, Asian markets moved to a risk-on mode after Trump suggested that the United States could wrap up its military campaign against Iran within two to three weeks, with or without a deal.
South Korean stocks jumped nearly 8 percent, with Samsung Electronics up 11.4 percent and SK Hynix up 9.4 percent.
Taiwan shares rose as much as 4.6 percent and were on track for their biggest one-day jump since April 2025.
Jakarta shares climbed as much as 2.3 percent after declining for the last four sessions.
Philippine equities rose to their highest level in nearly a week with a 1.7 percent gain.
“The headlines may have served as a spark. But the big rally in risk was almost certainly driven by portfolio rebalancing and dealer flows,” said Kyle Rodda, a senior financial analyst at Capital.com.
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