BENGALURU: Emerging Asian equities advanced on Friday, as investors weighed ongoing US trade talks with regional governments, viewing President Donald Trump’s tariff threats as a strategic move to secure favourable concessions.
An MSCI gauge of equities in emerging Asian countries jumped to its highest since early January 2022 but slipped in the afternoon, as South Korea’s equities weighed. A subset of ASEAN equities hit a six-week high.
Traders have reacted more calmly to tariff threats this time, compared with the dramatic swings of early April after Trump’s Liberation Day levies triggered chaos in global financial markets.
“Sentiment has improved with the increased certainty surrounding the conclusion of US-imposed tariffs,” said Kenneth Tang, senior portfolio manager at Nikko Asset Management. “This clarity (on tariffs) has helped to alleviate fears.”
The anxiety has been allayed largely because import duties remain unchanged for most countries, there is further room for talks, and traders are betting the new US threats are tactics designed to extract more concessions.
But globally, US and European stock futures dipped during Asia trade after Trump stepped up tariff threats against Europe and Canada.
In Southeast Asia, Singapore’s FTSE Straits Times index set a new all-time high for an eighth straight session, driven by strong inflows in its industrial and telecom sectors, while Indonesia’s benchmark jumped to a three-week high.
Thailand’s shares jumped 1.5% to become the region’s top gainers, while benchmarks in Malaysia and Taiwan ticked modestly higher. Tang said he remained constructive on ASEAN for the second half, with a preference for Singapore because of attractive valuations and strong dividend yields, and the Philippines, for its improved macroeconomic outlook.
“We believe ASEAN is well-positioned for further performance due to a weakening USD and domestic policy accommodation.”
ASEAN groups 10 Southeast Asian nations, with Indonesia, Malaysia, Singapore and Thailand among its top economies.
In China, the Shanghai Composite hit a nine-month high earlier in the day, but pared those gains to trade 0.2% higher in the afternoon. US Secretary of State Marco Rubio met his Chinese counterpart Wang Yi for talks on the sidelines of a regional meeting in Malaysia.
South Korea’s KOSPI gauge slipped late in the day but remained anchored around its August 2021 high.
Currencies slipped in the afternoon session in Asia. India’s rupee and Malaysia’s ringgit weakened 0.2%, while Japan’s yen eased 0.4%. Thailand’s baht and Taiwan’s dollar ticked higher.
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