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EMERGING MARKETS-Asian stocks hit by inflation worries, Singapore and Malaysia outperform

Published 08-03-2021, 12:52 pm
Updated 08-03-2021, 12:54 pm
© Reuters.
USD/JPY
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JP225
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USD/MYR
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USD/PHP
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JSH
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JARD
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NSEI
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JKSE
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KLSE
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ID10YT=RR
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KS11
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TWII
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SSEC
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GENT
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GENM
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PCGB
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SETI
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PSI
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BDO
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BPI
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STI
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* Singapore shares rise 2% to hit more than one-year high

* Jardine Strategic, Jardine Matheson boost Singapore shares

* Petronas Chemicals Group top gainer in Malaysia

March 8 (Reuters) - Asian shares broadly reversed course to trade lower on Monday as higher oil prices raised inflation worries and offset optimism over the passage of a $1.9 trillion U.S. stimulus bill, while Singapore and Malaysian stocks rose on local corporate news.

Equity markets in China .SSEC and the Philippines .PSI fell more than 1.5%, while in South Korea .KS11 they were about 1% lower.

Earlier on Monday, Asian shares were broadly higher after the mammoth U.S. stimulus bill cleared the Senate over the weekend, boosting optimism about the global economic recovery. spike in oil prices past $70 for the first time since the pandemic, though, sparked some worries about inflation for energy-hungry Asia. O/R

Broadly, rising prices had already been on investors' minds, pushing U.S. bond yields higher and keeping pressure on Asia's bond markets and equity valuations.

"The last thing anyone wants in a recovering global economy is higher oil prices," said Stephen Innes, the chief global markets strategist at axi.

"We are likely nearing a point when higher oil prices become a negative rather than a positive influence over risk assets via the inflation throughput to higher yields."

The region's currencies came under pressure as the dollar firmed on the back of stronger-than-expected jobs data and the pandemic relief bill, on top of higher oil bills. South Korea's won KRW=KFCTC fell 0.6%.

On the other end, Singapore stocks .STI jumped 2% to their highest in more than a year, led by a rally in Jardine Strategic JSH.SI and Jardine Matheson JARD.SI , which climbed nearly 20% and 14%, respectively.

Jardine Matheson said it plans to buy the remaining 15% of Jardine Strategic that it does not already own for about $5.5 billion to simplify the structure of the sprawling Asian conglomerate that has a foot in construction to aviation. Malaysia, shares .KLSE jumped 1.5%, with Petronas Chemicals Group PCGB.KL the biggest gainer. The petrochemical product maker jumped close to 10% after CGS-CIMB upgraded the stock to "Add" and raised its price target.

Indonesia's shares .JKSE and the rupiah IDR= dipped. The country is susceptible to higher U.S. yields given that the Southeast Asian nation houses some of the highest-yield debt in emerging markets.

The yield on Indonesia's 10-year bonds ID10YT=RR shot up 18.4 basis points to 6.809%.

HIGHLIGHTS:

** Indonesian 3-year benchmark yields up 12.1 basis points to 5.561%

** Genting Malaysia GENM.KL , Genting Bhd GENT.KL were among the top gainers in Malaysia

** In the Philippines, Bank of the Philippine Islands BPI.PS and BDO Unibank Inc BDO.PS fell the most

Asia stock indexes and currencies at 0636 GMT COUNTRY

FX RIC

FX

FX

INDEX

STOCKS STOCKS

DAILY % YTD %

DAILY % YTD % Japan

JPY=

-0.07

-4.78 .N225 -0.42

4.73 China

CNY=CFXS -0.19

+0.30 .SSEC -1.62

-0.80 India

INR=IN

+0.01

+0.08 .NSEI 0.52

7.40 Indonesia

IDR=

-0.21

-1.96 .JKSE -0.26

4.40 Malaysia

MYR=

-0.39

-1.66 .KLSE 1.45

-0.24 Philippines PHP=

+0.14

-1.07 .PSI

-1.81

-5.36 S.Korea

KRW=KFTC -0.63

-4.15 .KS11 -1.00

4.27 Singapore

SGD=

-0.18

-1.78 .STI

2.00

8.10 Taiwan

TWD=TP

+0.81

+1.54 .TWII -0.22

7.38 Thailand

THB=TH

-0.72

-2.47 .SETI 0.79

7.38

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