EMERGING MARKETS-Rupiah inches up, shares fall as Bank Indonesia stands pat

Published 21-01-2021, 02:04 pm
© Reuters.

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

* Asian stocks https://tmsnrt.rs/3f2vwbA

* Bank Indonesia leaves key rate unchanged at 3.75%

* Taiwanese shares close at a record high

* S. Korean stocks extend gains to a third day

By Shriya Ramakrishnan

Jan 21 (Reuters) - Indonesia's rupiah edged higher and shares fell after the country's central bank left interest rates unchanged, while South Korean and Taiwanese shares surged on strong export readings from both the tech-reliant economies.

Bank Indonesia (BI), which had cut borrowing costs five times last year to support a pandemic-hit economy, left its key policy rate at a record low of 3.75% and said the rupiah IDR= was still undervalued and had room to strengthen. majority of analysts in a Reuters poll had expected the central bank to keep rates steady to maintain an attractive interest rate differential on its high-yielding debt, given the recent rise in U.S. bond yields.

"The string of rate reductions in 2020 have yet to bear fruit," said Nicholas Mapa, a senior economist at ING.

"We believe BI will remain open to easing policy further in the near-term should inflation remain subdued with IDR stability likely the main decision point."

The rupiah IDR= was up 0.3% after the decision, while shares in Jakarta .JKSE traded 0.3% lower.

Most other emerging Asian stock markets and currencies strengthened as optimism about the new U.S. administration's hefty spending plans drove buying of riskier assets and dented the dollar's safe-haven appeal.

The Malaysian ringgit MYR= and South Korean won KRW=KFTC advanced 0.3% and 0.2% each against the greenback.

South Korean shares .KS11 extended gains to a third straight session, while Taiwanese stocks .TWII closed up more than 2% at an all-time high.

Data showed South Korea's exports expanded at a much faster pace in the first 20 days of January, and Taiwan's export orders hit a record high in 2020. Korea and Taiwan have witnessed a strong rebound in exports as the pandemic-driven global shift to remote work spurred demand for memory chips used in laptops and servers. The KOSPI and Taiwan stocks have risen more than 9% each this month.

"If global fiscal stimulus and the contact-free digitalisation trend continues post-COVID, Korea's IT, semiconductor and auto exports could outperform market expectations," analysts at Standard Chartered (LON:STAN) wrote in a note.

Indian shares jumped to a record high and the benchmark Sensex .BSESN scaled the 50,000 level for the first time, boosted by heavyweight Reliance Industries RELI.NS after the country's stock exchanges approved a $3.4 billion deal with the Future Group. .BO

HIGHLIGHTS:

** Indonesian 10-year benchmark yields are up 2.3 basis points at 6.298%

** Top gainers on the Singapore STI .STI include Jardine Matheson Holdings Ltd JARD.SI up 2.67% at S$57.71, Jardine Cycle & Carriage Ltd JCYC.SI up 2.39% at S$23.09

** Top losers on the Jakarta stock index .JKSE include Duta Intidaya Tbk PT DAYA.JK down 6.99% at 346 rupiah; Sumber Global Energy Tbk PT SGER.JK down 6.97% at 935 rupiah

Asia stock indexes and

currencies at 0818 GMT

COUNTRY FX RIC

FX

FX

INDEX STOCKS STOCKS

DAILY % YTD %

DAILY YTD %

%

Japan

JPY=

+0.00 -0.27 .N225

0.82

4.78 China

CNY=CFXS

-0.02 +0.99 .SSEC

1.07

4.27 India

INR=IN

+0.10 +0.14 .NSEI

0.67

5.45 Indonesi IDR=

+0.29 +0.43 .JKSE

-0.25

7.27 a

Malaysia MYR=

+0.29 -0.29 .KLSE

-0.39 -1.96 Philippi PHP=

-0.01 -0.09 .PSI

-0.04

0.01 nes

S.Korea

KRW=KFTC

+0.19 -1.09 .KS11

1.49 10.00 Singapor SGD=

+0.00 -0.27 .STI

0.51

5.99 e

Taiwan

TWD=TP

+0.15 +0.39 .TWII

2.20

9.65 Thailand THB=TH

+0.10 +0.03 .SETI

0.00

4.58

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