BENGALURU: Emerging Asian equities advanced on Monday after bleak US labour data strengthened the case for a Federal Reserve rate cut next week, and easing political tensions further lifted investor confidence for risk assets in Indonesia and Thailand.
Indonesia’s stocks advanced 0.7 percent, while Thai shares were headed for their highest close in nearly four weeks.
Benchmark indexes in Taiwan and Singapore scaled all-time highs, while South Korea’s KOSPI index reached a near four-week high.
An MSCI index of EM Asia stocks rose 0.7 percent, while a gauge of ASEAN shares advanced for the fourth consecutive session to scale a near two-week high.
Lower US interest rates drive investors toward emerging markets, where higher yields and stronger currencies improve sentiment and ease the burden of dollar-denominated debt.
Dismal US jobs data released last week sealed the case for a Fed rate cut on September 17, with the focus now on Thursday’s inflation report for cues about the scale of the easing.
Traders have fully priced in a quarter-point rate cut, with a 10 percent chance of a half-point cut, as per the CME FedWatch tool.
In Thailand, stocks traded 0.4 percent higher at 1,269.78 points, while the baht hit a more than four-year high, as the election of a political veteran as new prime minister capped off months of political uncertainty.
Foreign investors have bought 689 million baht ($21.61 million) worth of Thai stocks on a net basis in the first five sessions in September, as per LSEG data compiled by Reuters.
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