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The Philippine peso firmed on Thursday
after its central bank raised rates for the first time in more
than three years, while Asian shares tumbled on concerns around
surging inflation, its impact on retail demand, and the threat
of a recession.
Stocks in Manila fell 1%, while the Philippine peso
edged up 0.2%. The Philippine central bank raised its
benchmark interest rate by 25 basis points, as expected, to
address rising inflationary pressures.
“With the recovery in hand and price pressures surging,
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Bangko Sentral ng Pilipinas (BSP) finally decided to join the
rate-hike club… The bigger development was the quick walk-back
of pandemic support with BSP closing the provisional advance and
tweaking the bond purchase window,” said Nicholas Antonio Mapa,
senior economist at ING.
Equities in the region also tracked weakness on Wall Street
overnight as retail giant Target Corp warning of a
bigger margin hit due to rising fuel and freight costs, and
Walmart Inc flagging a similar squeeze.
It was the worst one-day loss for the S&P 500 and Dow Jones
Industrial Average since June 2020.
“The focus has now shifted towards concerns about US
growth as the Fed tightening is well understood and well priced
in,” said Khoon Goh, head of Asia research at ANZ.
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“The market is now concerned that the US economy might be
slowing a lot faster than anticipated, particularly given the
negative earnings reports coming up from retail companies
overnight,” said Goh.
Shares in India and Taiwan led losses for
Asian markets, falling more than 2% each.
Regional currencies weakened too, even as the US dollar
eased. Risk sentiment remained fragile after US Federal
Reserve Chair Jerome Powell ratcheted up the hawkish rhetoric.
South Korean shares fell more than 1% while the won
The Indonesian rupiah, down more than 2.5% since the
country announced plans in April to ban exports of palm oil,
fell 0.3%.
Long-tenor bonds in Singapore, seen as a
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safe-haven bet, saw yields slip 45 basis points to 2.715%.
HIGHLIGHTS:
** In the Philippines, top index losers are SM Investments
Corp down 3.45% at 840 pesos; International Container
Terminal Services Inc down 1.93% at 213.6 pesos
** Thailand’s central bank said it has no need to raise
interest rates following the Fed’s hikes as domestic factors and
its economic recovery will be the main issues when deciding
policy
Asia stock indexes and
currencies at 0736 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan +0.09 -10.1 <.n2>
China
India -0.15 -4.34 <.ns ei>
Indonesi -0.31 -3.26 <.jk a se>
Malaysia -0.26 -5.47 <.kl se>
Philippi +0.13 -2.65 <.ps nes i>
S.Korea
Singapore +0.22 -2.87 <.st e i>
Taiwan -0.17 -6.96 <.tw ii>
Thailand +0.07 -3.57 <.se ti>
(Reporting by Riya Sharma in Bengaluru; editing by Uttaresh.V)
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