EMERGING MARKETS-South Korea, Taiwan stocks lead losses in Asia on inflation fears

  • Reuters
  • Stock Market News
EMERGING MARKETS-South Korea, Taiwan stocks lead losses in Asia on inflation fears
Credit: © Reuters.

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

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

* South Korean shares down 1.8%, eye worst day since March 9

* Malaysia imposes COVID-19 curbs as infections spike

* Philippines detects cases of Indian virus variant

By Rashmi Ashok

May 11 (Reuters) - Tech-heavy equities in South Korea and Taiwan led losses in Asian markets on Tuesday as investors worried over a potential spike in inflation, while rising COVID-19 cases and curbs in other parts of the region further dampened sentiment.

U.S. stocks toppled off record highs overnight as traders fretted that strong demand amid tight supply of basic materials could sharply accelerate consumer prices, with markets now on edge ahead of U.S. inflation data due later on Wednesday.

Higher inflation could force the U.S. Federal Reserve to raise interest rates sooner than planned, which could put Asia's central banks in a tough spot, as ongoing COVID-19 outbreaks and lockdowns make matching the rate-hike cycle difficult.

Shares in Seoul .KS11 slid 1.8% to be on track for their worst session since March 9, while those in Taipei .TWII lost 3.3% to hit a one-week low. The won KRW=KFTC and Taiwan dollar TWD=TP , both heavily reliant on exports, fell 0.5% and 0.2%, respectively.

Malaysia's stocks .KLSE were off 0.6% and the ringgit MYR= dipped 0.2%, after the country imposed a new nationwide lockdown to halt a third wave of COVID-19 infections which is putting a strain on its healthcare system. showed its economy contracted by a smaller than expected margin in the first quarter, supported by exports, but that did little to lift the mood as worries over the impact of the latest lockdown weighed. tighter restrictions will cause a significant dent to the economy in the current quarter, imparting a downside risk to our 16.7% second-quarter GDP growth view, which mainly stems from a huge 17% plunge a year ago rather than any underlying recovery," analysts at ING wrote.

In Philippines, where partial lockdown measures were recently tightened in April, authorities detected its first two cases of a coronavirus variant initially identified in India, which some preliminary studies have shown spreads more easily. showed Philippines' gross domestic product (GDP) fell 4.2% in the March quarter from a year earlier, worse than the median estimate of a 3.0% contraction in a Reuters poll, though sequential output figures showed a recovery was underway . peso PHP= fell 0.2% while stocks in Manila .PSI were marginally higher.

"The growth outlook for the Philippines remains relatively downbeat... Although we continue to expect second-quarter GDP to post growth on a year-on-year basis, we may have to trim our expectations, especially if partial lockdowns are extended through May," analysts at ING wrote.

The Bangko Sentral ng Pilipinas will hold a monetary policy meeting on Wednesday, where it is largely expected to keep rates unchanged at record lows, with comments on the impact of the latest curbs keenly watched.

HIGHLIGHTS:

** Top losers on the Singapore STI .STI include: Yangzijiang Shipbuilding Holdings Ltd YAZG.SI down 2.63% and Ascendas Real Estate Investment Trust AEMN.SI down 2.33%

** Indonesian 10-year benchmark yields are down 0.3 basis points to 6.401%​​ while 3-year benchmark yields are up 1.1 basis points to 5.032%​​

** Top losers on FTSE Bursa Malaysia Kl Index .KLSE include Genting Malaysia GENM.KL down 2.82% and Sime Darby Plantation SIPL.KL down 2.1%

Asia stock indexes and

currencies at 0511 GMT

COUNTRY FX RIC

FX

FX INDE STOCKS STOCK

DAILY YTD %

X DAILY S YTD

%

%

% Japan

JPY=

-0.02 -5.11 <.N2 -3.27 4.04

25>

China

S>

EC>

India

INR=IN

-0.15 -0.54 <.NS -0.71 6.11

EI>

Indones IDR=

+0.00 -1.09 <.JK -0.92 -0.97 ia

SE>

Malaysi MYR=

-0.22 -2.28 <.KL -0.58 -3.22 a

SE>

Philipp PHP=

-0.17 +0.23 <.PS

0.15 -11.3 ines

I>

9 S.Korea

C>

11>

Singapo SGD=

-0.09 -0.44 <.ST -0.71 11.11 re

I>

Taiwan

TWD=TP

-0.19 +2.20 <.TW -3.69 12.67

II>

Thailan THB=TH

+0.00 -3.57 <.SE -0.30 9.25 d

TI>

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