EMERGING MARKETS-Indian shares slump on record COVID-19 spike; Asian currencies fall

  • Reuters
  • Stock Market News
EMERGING MARKETS-Indian shares slump on record COVID-19 spike; Asian currencies fall

* India daily COVID-19 cases cross 100,000

* RBI policy meeting on Wednesday

* Indonesian 10-year bond yields at 4-week low

April 5 (Reuters) - Indian shares dived more than 2% on Monday after the country imposed fresh restrictions as coronavirus cases touched a record high, while a firmer dollar dragged down Asia's emerging currencies lower in holiday-thinned trade.

Stocks and currencies in the region were trading lower for much of the session as strong U.S. jobs data raised worries that the Federal Reserve may hike interest rates sooner than indicated.

India's NSE Nifty 50 index .NSEI fell 2.3% and the rupee INR=IN slipped 0.5% after the country's coronavirus caseload jumped by more than a 100,000 to surpass 12.5 million and fresh curbs were imposed in the financial capital of Mumbai. .BO

Maharashtra, the state that houses Mumbai, will start shutting shopping malls, cinemas, bars, restaurants and places of worship from Monday evening. elsewhere was limited as markets in Australia, Hong Kong, Taiwan, Asian powerhouse China and most parts of Europe were closed.

"With Europe on holiday today, volumes will rapidly taper this afternoon in Asia," said Jeffrey Halley, a senior Asia Pacific market analyst at OANDA.

The dollar and 10-year Treasury yields US10YT=RR gained late in Asian trade as data on Friday showed the U.S. economy created more jobs than expected in March, although initial market reaction was scant due to the Easter holidays.

The prospects of a return to a full employment is raising questions about whether the Fed can stick to its pledge to keep interest rates steady through 2023. The market has fully priced in one rate hike by the end of next year. FFZ2 FFF3

A rate hike could narrow the rate differential between Asia's high-yielders and U.S. Treasuries. Minutes of the Fed's March meeting will be released on Wednesday.

The rupiah IDR= was 0.1% firmer on the dollar, with benchmark 10-year bond yields ID10YT=RR at their lowest level in around four weeks.

In comments late on Thursday, a senior Bank Indonesia deputy governor said the central bank has room to cut its key policy rates due to low inflation. Indonesia left its key policy rate at a record low of 3.50% last month to stave off capital outflows and protect the rupiah, which fell around 2% in March. Reserve Bank of India (RBI) ends its two-day meeting on Wednesday, where it is expected to leave its key interest rate unchanged and may revise inflation projections higher. [nL4N2LY0M8

"A relatively dovish guidance and/or OMO (open market operation) purchases/twist operations could trigger a rally in fixed income markets," Barclays (LON: BARC ) analysts said.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields fell 13.70 basis points to 6.624%

** Philippines' Duterte extends coronavirus curbs in capital, nearby provinces Thai March headline CPI drops 0.08% from a year earlier; Goldman Sachs (NYSE: GS ) expects Thailand to be one of the slowest to hike policy rates in the region, starting 2023 Asia stock indexes and currencies at 0631 GMT COUNTRY

FX RIC

FX

FX

INDEX

STOCKS STOCKS

DAILY % YTD %

DAILY % YTD % Japan

JPY=

+0.05

-6.70 .N225 0.79

9.64 China

CNY=CFXS -

-0.60 .SSEC -

0.33 India

INR=IN

-0.45

-0.50 .NSEI -2.34

3.85 Indonesia

IDR=

+0.07

-3.24 .JKSE -0.43

0.11 Malaysia

MYR=

-0.05

-2.90 .KLSE -0.18

-2.74 Philippines PHP=

-0.11

-1.21 .PSI

0.81

-9.03 S.Korea

KRW=KFTC -0.02

-3.68 .KS11 0.26

8.61 Singapore

SGD=

-0.03

-1.87 .STI

0.90

12.89 Taiwan

TWD=TP

-

-0.18 .TWII -

12.48 Thailand

THB=TH

-0.22

-4.46 .SETI -1.07

8.96

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