EMERGING MARKETS-Asian stocks fall on U.S. inflation spike; Taiwan stocks recover

  • Reuters
  • Stock Market News
EMERGING MARKETS-Asian stocks fall on U.S. inflation spike; Taiwan stocks recover
Credit: © Reuters.

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA

* Taiwan stocks add 0.6% after sell-off on Wednesday

* Oil prices fall, hurting Thai energy companies

* Various markets closed on Eid holiday

By Rashmi Ashok

May 13 (Reuters) - Asian equities fell on Thursday after data showing a jump in U.S. inflation reinforced fears that the Federal Reserve would o raise interest rates sooner than expected, while Taiwan's stocks attempted a recovery from the previous day's slump.

Currencies were also broadly weaker as the U.S. dollar stood tall following the inflation data, with the South Korean won KRW=KFTC down 0.5% to a six-week low, while the Thai baht THB=TH was off 0.4%.

Markets in India, Indonesia, Malaysia, Philippines and Singapore remained closed for the Eid festival.

Overnight, U.S. stocks tumbled after data showed consumer prices increased by the most in nearly 12 years in April as booming demand pushed against supply constraints, raising bets of a rate hike as soon as December next year. U.S. rates puts pressure on Asian markets, which yield-seekers usually prefer given their relatively higher interest rates. Furthermore, resurgences of COVID-19 make it harder for Asian centyral banks to match a rate-hiking cycle.

If U.S. inflation data does not calm in the next few months, the challenge to the Fed's credibility over its insistence that inflation is only transitory could be disruptive, Tai Hui, chief Asia market strategist at J.P. Morgan Asset Management, wrote.

"Asia will probably follow the U.S. in the near term, except for the Chinese onshore market. COVID-19 outbreaks in several parts of Asia are adding to uncertainties on the pace of domestic demand recovery, despite strong export performance, especially in northeast Asia."

Stocks in Taipei .TWII reversed early losses to rise 0.6%, trying to recover after a 4% tumble on Wednesday that was sparked by warnings that Taiwan could face tighter restrictions that would shut non-essential businesses.

The warning from authorities came after a rare rise in domestic COVID-19 infections that has unnerved the island, which has so far successfully curbed the spead of infections and never gone into complete lockdown. Thursday, Taiwanese cities tightened restrictions on access to public venues like gyms and libraries, but the government did not announce any sweeping curbs.

Across the last two sessions, the stock index lost nearly 8%. By April end, it had clocked a massive 100% rise from lows touched in March last year, as demand for its electronics exports skyrocketed due to the shift to working from home.

Equities in Thailand .SETI fell nearly 1%, as India's COVID-19 resurgence hit oil prices, denting large-cap energy firms. PTT PTT.BK shed 0.6% while Gulf Energy Development GULF.BK lost 0.7%.


** Thailand's 10-year government bond yields are up 3 basis points at 1.69%​​ while the 3-year benchmark yield is up 1 basis points at 0.57%​​

** Taiwan's large-cap electronics firm Hon Hai Precision Industry 2317.TW rose 2.5%

** South Korea's benchmark index .KS11 traded 0.5% lower, but is 9.5% higher YTD

Asia stock indexes and

currencies at 0329 GMT








% Japan


-0.02 -5.86 <.N2 -1.84 0.67










-0.01 +1.87 <.TW

0.51 8.49


Thailan THB=TH

-0.35 -4.37 <.SE -0.85 7.53 d


(Editing by Simon Cameron-Moore)

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