BENGALURU: Singapore stocks notched a record high and South Korea clawed back early declines to close higher on Wednesday, as markets assessed scant details of the US-Iran peace deal and awaited Federal Reserve Chair Kevin Warsh’s first policy decision.
Equities in Seoul reversed course to close up 1.6 percent, helping MSCI’s gauge of emerging Asia shares scale a two-week high.
Singapore stocks advanced as much as 1.6 percent to a record high, supported by heavyweight banks and other blue chips.
Indonesia’s Jakarta Composite Index reversed early gains to trade 0.6 percent lower, although it has gained around 16 percent since last week’s off-cycle rate hike, largely driven by an over 17 percent surge in financials.
The rupiah has also gained more than 2 percent since the surprise rate move, last trading at 17,745 per dollar.
A majority of economists in a Reuters poll expect Bank Indonesia (BI) to raise rates by 25 basis points again on Thursday, although some analysts warn that additional tightening may fall short of relieving pressure on the rupiah.
Markets are also awaiting MSCI’s global market accessibility review, due early on Thursday in Jakarta, which will decide whether Indonesia keeps its “emerging market” classification.
Angus Mackintosh, ASEAN specialist at Aletheia Capital, said BI was highly likely to raise rates again to support the rupiah, and expected MSCI to keep Indonesia’s emerging-market status in its review later this week.
Globally, attention will turn to Fed Chair Warsh’s efforts to navigate a dovish White House while markets continue to price in a rate hike later this year. The Fed’s policy meeting is due to wrap up later in the day.
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