Asian emerging market shares were broadly weaker on Thursday, hurt by the dollar's strength, as a hawkish tilt by Federal Reserve policymakers encouraged bets for quicker US interest rate hikes, and made investors more wary of riskier assets.
Equities in South Korea dropped, after the country's central bank raised interest rates and upgraded its 2022 inflation forecast, bolstering expectations for further policy tightening.
Shares in Seoul fell as much as 0.7%, while stocks in Manila, Singapore and Shanghai dropped 0.8%, 0.2% and 0.1%, respectively.
Supporting the greenback, several Fed policymakers said they would be open to speeding up the taper of their bond-buying program if inflation stayed high, and to move more quickly to raise interest rates, minutes of the central bank's Nov. 2-3 policy meeting showed on Wednesday.
Hawkish sentiment from the Fed weighed on regional currencies, with Malaysia's ringgit, Philippine peso and the Indonesian rupiah easing between 0.1% and 0.3%.
In South Korea, Bank of Korea's monetary policy board raised the policy interest rate by 25 basis points to 1.00%, as expected by 29 of 30 analysts in a Reuters poll
The central bank is expected to continue its policy tightening cycle with rates tipped to reach 1.50% by the end of 2022, raising concerns about whether households will be able to service their debt repayments. The won weakened 0.3%.
"Given BOK's hints at the October meeting, today's hike is already well-priced in and therefore, its actualization will not move KRW rates," Duncan Tan, Rates Strategist at DBS said in a note.
"What could move KRW rates today... is likely to be BOK's communications related to the 2022 hike path"
Stocks in Jakarta gained 0.7%, a day after the country's central bank governor said Bank Indonesia plans to reduce the amount of excess liquidity in the banking system, but will keep interest rates low until it sees signs of inflation rising.
In a fresh development in China's property sector crisis, Kaisa Group Holdings Ltd said it wants to extend the maturity of a $400 million bond by a year-and-a-half as part of efforts to avoid a default and resolve a liquidity crisis.
Shares of the embattled developer, which resumed trading after suspension on Nov. 5, soared as much as 23.8%.
** Top gainer on the Jakarta stock index was First Media Tbk PT, up 25%
** In the Philippines, top index loser was Converge Information & Communications Technology Solutions Inc , down 3.3%
** Malaysia's ringgit hits lowest since Aug. 24