BANGKOK: Emerging Asia’s stocks and currencies rose on Wednesday, driven by hopes of more economic stimulus in China, with investors also focusing on Russian-Ukraine peace talks and the U.S. Federal Reserve.
Equities in China surged more than 3% and the yuan inched up 0.4% in its best session in over two months, after Vice Premier Liu He indicated China plans to take measures to boost the economy and would also announce policies favourable to capital markets.
Stocks in Thailand climbed nearly 1%, while those in Singapore and South Korea gained over 1%.
Currencies also edged higher, with the Thai baht and South Korean won clocking a 0.4% gain each.
The gains followed a relief rally on Wall Street overnight, driven by hopes of a resolution to the conflict in Ukraine.
Ukrainian President Volodymyr Zelenskiy said on Wednesday peace talks with Russia were sounding more realistic but more time was needed.
Moves in Asia were still cautious ahead of a closely watched meeting of the Fed later in the day. Markets have already priced in a 25 basis points rate hike and will also look for further policy cues in light of surging inflation and volatile commodity prices following Russia’s invasion of Ukraine.
“The bigger question is whether one should expect a carefully hawkish Fed or an aggressively hawkish Fed in tonight’s meeting,” Bank of Singapore currency analyst Moh Siong Sim said.
“A hawkish tone is likely to keep the dollar strong against the currencies of developed markets and markets will also look out for whether the Fed keeps the door open for a 50 basis points hike further down the road,” the analyst said.
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