BENGALURU: Indonesian assets were steady on Wednesday after the country’s central bank stayed pat on monetary policy as expected, while investors across emerging Asia exercised caution ahead of artificial intelligence major Nvidia’s quarterly results.
The Indonesian rupiah and stocks were last down 0.3% and 0.2%, respectively.
Bank Indonesia held interest rates unchanged, saying changed global dynamics after the US election meant it had to focus on stabilising the local currency.
“Until we see the US dollar starting to look softer again and Indonesian rupiah showing a few signs of strength, I don’t expect them to do much in the way of easing,” said Robert Carnell, Asia regional head of research at ING.
Bank Indonesia’s move is expected to support the rupiah from further depreciation. The currency has lost 1.1% this month and nearly 3% over the year.
Meanwhile, the Jakarta stock index has underperformed its peers, down 1.3% this year. In comparison, indexes in Malaysia and Singapore have gained roughly 10% and 16%, respectively.
Sentiment in the region was subdued in the run-up to Nvidia’s third-quarter results after Tuesday’s escalation in the Ukraine-Russia conflict
MSCI’s gauge of Asian emerging market equities was largely unchanged, while an index of Asian equities including Japan was down 0.5%.
Ukraine’s use of US missiles on Tuesday to strike inside Russia prompted Moscow to lower the threshold for a possible nuclear strike, driving investors away from risky emerging assets toward safe havens such as gold.
Shares in Malaysia and Thailand declined 0.2% and 0.3%, respectively. Southeast Asia’s top-performing stock market in 2024, Singapore, eased from its 17-year high touched on Tuesday.
Junvum Kim, sales trader at Saxo Capital Markets, said once the Nvidia results are released, it will become clearer how escalations in Russia’s war in Ukraine are impacting the market.
Positive results from Nvidia will spur Wall Street, which could potentially slow down a strengthening US dollar, if not reverse it, Kim said.
A slowdown in the greenback would help Asian equities and currencies, while a favourable outcome from the chipmaker would be a boon for its suppliers from South Korea and Taiwan.
Regional currencies were rangebound with the Malaysian ringgit rising 0.2%, while the Taiwan dollar easing 0.2%.
Shares in Taipei fell 0.7% whereas the benchmark in Seoul added 0.4%.
Meanwhile, Philippine stocks extended gains, rising as much as 2.5% in their fourth consecutive winning session, with the peso trading flat.
The Philippine central bank governor said a third rate cut could be expected at the December meeting as Bangko Sentral ng Pilipinas was still in its easing cycle.
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