Asian stocks, FX cautious as investors await IMF debate for growth clues

BANGKOK: Indonesian and Thailand equities led the way as emerging Asian stocks made tepid gains on Thursday, supported by an overnight drop in longer-dated US Treasury yields but cautious ahead of remarks by top central bank officials on the state of the global economy.

The gains came amid a lack of regional market catalysts such as economic data, with investors left to focus on the pullback in US yields and the upcoming speeches by central bank officials as a gauge of risk appetite.

Jakarta shares rose 0.5%, while Thai stocks gained for a third straight session, advancing 0.6% to their highest since April 7.

Shares in Singapore and South Korea advanced 0.5% and 0.4%, respectively, while Philippine stocks dropped more than 1%.

With quickening global inflation a major concern, markets will be looking for policy clues from US Federal Reserve Chairman Jerome Powell, European Central Bank President Christine Lagarde and others at an International Monetary Fund (IMF) panel.

“There is some thought Powell and Lagarde will magically stabilise markets. But higher inflation remains central to the bond market,” said Stephen Innes, managing director at SPI Asset Management.

“I don’t think this is a forum for Powell to announce anything new, but nonetheless, there is probably hesitancy for larger movements and in markets ahead of this IMF debate,” Mitul Kotecha, senior EM strategist with TD Securities, said.

Chinese shares dropped more than 2%, extending losses to a fifth session, as prolonged COVID-19 lockdowns and lingering geopolitical risks eroded investor confidence.

In contrast, Indian shares outperformed their peers in the region, with a 1.1% jump amid upbeat near-term risk appetite.