Precise Investors


Asian currencies drop, stocks decline on weak tech earnings

Asian currencies

Most emerging market stocks dropped, led by South Korean and Taiwan stocks, after Meta’s earnings forecasts disappointed

The Philippine peso and South Korean won led losses on Thursday among subdued Asian emerging currencies, while stock markets in the region were dragged lower by a weak tech sector, after Facebook parent Meta Platforms disappointed with its forecasts.

The won was trading down 0.6%, while the peso dropped 0.7% to its lowest since November 2022.

The Indonesian rupiah dropped 0.4%, losing the ground which it gained a day earlier when the country’s central bank surprised markets by delivering an unexpected quarter-point rate raise to support the currency.

We believe BI (Bank Indonesia) struck a hawkish tone and left the door open to further hikes, retaining a strong focus on its FX stability goal and a still-sanguine view on the growth outlook, Nomura analysts stated in a note.

Analysts at Citi said the “hike is unlikely to do much for the rupiah in the near-term”, largely due to an uncertain global macro backdrop. They now see smaller cumulative BI rate cuts of just 100 bps by 2025, compared to an earlier expectation of 150 bps.

In other regional currencies, the Malaysian ringgit depreciated 0.2%, while the Thai baht shed 0.3%.

Most emerging market stocks dropped, led by South Korean and Taiwan stocks, after Meta’s earnings forecasts disappointed. Tech bellwethers Alphabet, Microsoft and Intel are due to report earnings later on Thursday.

South Korean stocks dropped 1.4%, whereas shares in Taiwan shed 1.3%. Both gained more than 2% in the previous session.

Stocks in Malaysia remained largely unchanged after data showed that the country’s CPI added 1.8% from a year earlier in March.

We think inflation could pick up somewhat due to the services tax hike starting in March, but it will remain manageable at around 2%, according to MUFG’s Lloyd Chan.

Singapore stocks were down 1.3%, while Indonesian shares dropped 0.6%.

Bucking the trend, Philippine shares advanced 0.4%, while stocks in Thailand added 0.3%.

The Vietnamese dong was up 0.4%, distancing itself from its record low hit last week.

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