BENGALURU: Indonesian equities hovered around four-month highs on Tuesday to lead gains across Asia as investors prepared for a potential rate cut from the central bank, while most emerging currencies traded in a tight range against a steady US dollar.
Jakarta’s benchmark index rose as much as 0.9% before trimming gains, eyeing a sixth straight session of advances.
Bank Indonesia is widely expected to resume its easing cycle in a policy meeting on Wednesday, emboldened by the rupiah’s recent strength that has given it room to focus on supporting growth.
The central bank is likely to “opportunistically” deliver a 25-basis-point cut, according to Barclays
analysts, bringing its benchmark rate to 5.50%.
The rupiah firmed 0.3% on the day, extending a rebound of more than 3% from record lows in early April.
Most equity markets in Asia were firmer as investors put Moody’s downgrade of US credit ratings in the rearview mirror after Treasury Secretary Scott Bessent dismissed the decision via television interviews.
Stocks in Singapore, Thailand and China posted moderate gains.
Equities in the Philippines underperformed, slipping for a fifth consecutive day, pressured by a string of negative headlines, including a widening balance of payments (BOP) deficit that hit $2.6 billion in April — up sharply from $639 million a year earlier.
The central bank attributed the ballooning gap to higher debt servicing using foreign reserves.
Investors in Philippine stocks have been concerned by higher local fuel pump prices, some recent political noises, softer local vehicle sales and a widening BOP deficit data, said Michael L. Ricafort, chief economist at Rizal Commercial Bank Corp.
In currency markets, the Taiwan dollar, the Singapore dollar, and the Indian rupee were little changed while the Thai baht weakened modestly against a US dollar that traded sideways on Tuesday.