Emerging Asian stock markets experienced gains on Wednesday, following an uptick in Wall Street the previous day. However, currencies displayed mixed reactions against a strengthening dollar, amidst ongoing apprehensions regarding the fiscal stability of the U.S. and its trade strategies.
The Philippine stock market rose by 0.7%, and Singapore’s market climbed 0.6%, reaching a two-week high. South Korean shares also closed 1.3% higher, achieving their best closing in over three months.
U.S. President Donald Trump alleviated some trade tension over the weekend by postponing his threatened introduction of 50% tariffs on European Union imports, extending the deadline to July 9. Additionally, better-than-expected consumer confidence data from the U.S. contributed to the sustained optimism, leading to a significant surge in Wall Street stocks as investors returned after a three-day weekend.
The dollar index, which gauges the U.S. currency against six others, registered a 0.2% increase, building on Tuesday’s 0.6% gain. Analysts from Maybank noted that positive global developments, such as progress in U.S.-EU trade talks and potential changes in Japan’s bond issuance, have bolstered demand for U.S. assets.
However, Krung Thai Bank’s market strategist, Poon Panichpibool, cautioned that these gains might only be temporary due to persisting fiscal concerns, especially regarding the pending Senate vote on Trump’s tax-cut bill. In terms of emerging Asian currencies, the Indian rupee decreased by 0.2%, while the Singapore dollar saw a slight increase.
The South Korean won remained stable at 1,376.40 as investors awaited the Bank of Korea’s monetary policy announcement, anticipated to include a 25 basis point rate cut. Meanwhile, in Malaysia, both the ringgit and equities witnessed a marginal rise of 0.1%.
Notably, Malaysia’s Economy Minister, Rafizi Ramli, resigned following his defeat in the contest for the deputy presidency of the ruling political party.