BENGALURU: Most Asian equities advanced on Monday after China unveiled fresh measures to boost domestic consumption, although regional investors remained cautious amid escalating global trade tensions.
South Korean shares jumped 1.6% to their highest since February 27, while Malaysia’s benchmark climbed 1.1%, extending gains to a third straight session. Taiwan’s main index rose more than 1%.
China on Sunday unveiled sweeping measures to boost domestic consumption, including income hikes and childcare subsidies, just days after financial regulators urged an easing of credit restrictions — moves analysts say could revitalise Southeast Asia’s biggest trading partner.
The positive sentiment helped offset concerns about widening trade disputes after US President Donald Trump threatened 200% tariffs on European alcohol imports last week.
Malaysian shares, which confirmed a correction last week, found support from the China news. Indonesia’s benchmark, however, dropped 1%. The index is now down 18.4% from its September highs, not far from the 20% mark which would confirm bear territory.
Stock market corrections are fairly common, with the S&P 500 logging 56 such pullbacks since 1929, and typically cause limited damage unless they deteriorate into more severe bear markets, Reuters analysis of Yardeni Research data shows.
Meanwhile, regional currencies were mostly rangebound as investors awaited further directional cues about the economic impact of Trump’s erratic tariffs.
The South Korean won advanced 0.5%, while the Indonesia rupiah
and Thai baht slipped 0.2%. The Singapore dollar and Malaysian ringgit were largely flat. The Indian rupee advanced 0.2%.
The dollar index held steady near five-month lows in early Asian trading, having shed nearly 6% since January’s two-year peak as initial Trump-related growth optimism gave way to recession fears.
Meanwhile, investor focus turns to key central bank meetings from the US Federal Reserve and Bank Indonesia on Wednesday, where both are expected to stand pat on rates.
Analysts at Barclays expect the Fed to cut rates twice this year amid tariff-induced growth concerns, potentially giving Asian central banks more room to ease monetary policy despite inflation pressures.
Indonesia reported a 14% rise in February exports, a positive development for its economy, but with the rupiah down about 2% this year despite regular intervention, the central bank is likely to maintain its focus on currency stability.
Comments
Comments are closed for this article.