Futures show more than 84% chance of December rate cut
Regional currencies mostly stable, S.Korean won extends gain
South Korea finance minister vows action on forex volatility
By Sneha Kumar
Nov 26 (Reuters) - Most emerging Asian stock markets extended gains on Wednesday, led by South Korea and Taiwan, as expectations grew for a U.S. Federal Reserve interest rate cut next month.
The MSCI emerging Asia index .MIMS00000PUS rose 1% in its third straight session of gains as South Korean shares .KS11 advanced 2.1% and Taiwan shares .TWII climbed 1.2%.
Bets have firmed over the past few sessions for a quarter-point Fed rate cut next month, driven by weak economic data and comments from central bank officials backing monetary easing.
Fed funds futures are pricing an implied 84.4% probability of a 25-basis-point cut at the U.S. central bank's next meeting on December 10, compared to even odds a week earlier, according to the CME Group's FedWatch tool. 0#USDIRPR
Back in Asia, Malaysian .KLSE and Singapore equities .STI advanced 0.6% each, while Indonesian stocks .JKSE gained 0.4%. Shares in Manila .PSI and Bangkok .SETI were little unchanged.
Most stock benchmarks are set to end the year with robust gains, driven by economic growth, monetary policy easing and renewed risk appetite, particularly for artificial intelligence-related stocks.
South Korea's KOSPI index has jumped nearly 65% this year, making it the best performer in the region, while Indonesia, Singapore and Taiwan stocks have risen about 20% each.
"EM as an asset class has performed strongly this year as the direction of travel of U.S. rates matters more than the precise timing of when those cuts come," said Matthew Culley, a portfolio manager at Janus Henderson emerging market team.
"While volatility can persist in the short term, the mid-term outlook for EM remains bright."
Currencies were largely muted in the region, with the Thai baht THB=TH, Singapore dollar SGD=, Philippine peso PHP=, Indonesian rupiah IDR=, and Malaysian ringgit MYR= showing little changes on the day.
The South Korean won KRW=KFTC rose 0.3% in its second straight session of gains. It had hit a more than seven-month low earlier this week.
The country's finance minister vowed stern responses to excessive foreign exchange volatility as authorities closely monitor speculative trading and herd-like behaviour in the market.
HIGHLIGHTS:
** ASEAN re‑engagement with Myanmar 'difficult' even after polls, Thai foreign minister says
** Singapore orders Apple, Google to prevent government spoofing on messaging platforms
** Thai military takes charge of flood crisis as heavy rains hobble relief effort
Asian stocks and currencies at 0407 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.04 | +0.77 | .N225 | 1.98 | 24.38 |
China | CNY=CFXS | +0.03 | +3.07 | .SSEC | 0.14 | 15.63 |
India | INR=IN | +0.04 | -4.01 | .NSEI | 0.34 | 9.85 |
Indonesia | IDR= | -0.06 | -3.45 | .JKSE | 0.38 | 20.83 |
Malaysia | MYR= | 0.00 | +8.18 | .KLSE | 0.55 | -1.33 |
Philippines | PHP= | -0.10 | -1.25 | .PSI | -0.06 | -8.52 |
S.Korea | KRW=KFTC | +0.31 | +0.51 | .KS11 | 2.11 | 64.16 |
Singapore | SGD= | +0.05 | +5.00 | .STI | 0.57 | 19.11 |
Taiwan | TWD=TP | +0.34 | +4.62 | .TWII | 1.21 | 18.25 |
Thailand | THB=TH | +0.06 | +6.42 | .SETI | 0.00 | -9.38 |
(Reporting by Sneha Kumar in Bengaluru; Editing by Subhranshu Sahu)
((Sneha.kumar@thomsonreuters.com))
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