South Korean shares fall over 1%
South Korean won down 0.9%
Taiwan dollar up 0.2% at highest level in three years
By Roshan Thomas
June 13 (Reuters) - Asian equities and currencies slipped on Friday as investors fled to the safe-haven dollar after Israel launched strikes on Iran's nuclear and military sites, injecting fresh uncertainty in markets already roiled by trade uncertainty.
Israel said it was declaring a state of emergency in anticipation of a missile and drone strike by Tehran, after what it called a "preemptive strike" over Iran's nuclear programme.
Oil prices surged over 9%. Rising oil prices also typically pressure emerging Asian currencies by widening current account deficits in net oil-importing countries.
The South Korean won KRW=KFTC and the Philippine peso PHP= dropped 1.1% and 0.9% each. The Indian rupee INR=IN fell 0.5%.
Maybank analysts said in a note that broad dollar movements remain the major driver for Asian currencies.
An index measuring the dollar against six other currencies =USD rose 0.4%, rebounding from multi-year lows earlier this week after a lukewarm reception to the U.S.-China trade agreement by investors and cooler inflation data boosted bets on aggressive U.S. Federal Reserve interest rate cuts.
The Thai baht THB=TH weakened 0.3%. Maybank analysts said that while higher oil prices are weighing on the currency, the uptick in gold prices was also providing some support.
"We are cautious if the baht can hold decisively below the lower end of the range given risk of USD rebound. Geopolitical situation also remains uncertain and it is unclear if there can be a shift again," the analysts said.
The Malaysian ringgit MYR= lost 0.7%, in line with the broader movement, even as Malaysia stands out as the only net oil and gas exporter among the major emerging Asian economies.
Bucking the trend, the Taiwan dollar TWD=TP rose as much as 0.5% to its highest level in three years, before turning flat.
A Taiwan-based forex trader told Reuters that while foreign investors continued to enter Taiwan, a rebound in the U.S. dollar, as well as a weakening of the South Korean won, had reduced the magnitude of the currency's appreciation.
The central bank had also acted to keep the Taiwan dollar from strengthening more, keeping the currency close to the T$29.5 mark, the trader said.
Stock markets across the region also fell. MSCI's gauge of Asian emerging market equities .MIMS00000PUS dropped 1.3%.
South Korean shares .KS11 fell up to 1.5%. Equities in Taiwan .TWII, Singapore .STI and Malaysia .KLSE lost between 0.5% and 0.7%.
HIGHLIGHTS:
** Indonesia to cut contribution to South Korea fighter jet project
** South Korea President Lee to hold economic security meeting over Israel's strike on Iran, media reports say
Asia stock indexes and currencies at 0440 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.13 | +9.42 | .N225 | -1.27 | -5.53 |
China | CNY=CFXS | -0.18 | +1.60 | .SSEC | -0.72 | 0.78 |
India | INR=IN | -0.53 | -0.51 | .NSEI | -0.99 | 4.21 |
Indonesia | IDR= | -0.40 | -1.26 | .JKSE | -0.64 | 1.10 |
Malaysia | MYR= | -0.74 | +5.17 | .KLSE | -0.56 | -7.57 |
Philippines | PHP= | -0.88 | +3.39 | .PSI | 0.44 | -1.83 |
S.Korea | KRW=KFTC | -1.09 | +7.31 | .KS11 | -1.28 | 20.14 |
Singapore | SGD= | -0.37 | +6.38 | .STI | -0.49 | 3.05 |
Taiwan | TWD=TP | -0.05 | +10.47 | .TWII | -0.68 | -3.90 |
Thailand | THB=TH | -0.32 | +5.65 | .SETI | -0.29 | -19.63 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
(Reporting by Roshan Thomas in Bengaluru and Roger Tung in Taipei; Editing by Rachna Uppal)
((Roshan.Thomas@thomsonreuters.com))
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