Asian stocks climb as strong China PMI boosts sentiment

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Most stock markets in emerging Asia

rose on Wednesday after strong manufacturing activity data from

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China lifted sentiment, while investors continued to assess the

likelihood of further interest rate hikes by the U.S. Federal

Reserve.

Equities in Manila climbed 1% to lead gains.

Singapore’s benchmark index and Jakarta shares

advanced 0.3% and 0.2%, respectively.

Currencies in the region were mostly muted, with Malaysia’s

ringgit and Indonesia’s rupiah trading flat. The

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Singapore dollar was up 0.1%.

The Philippine peso rose 0.6%, while the Thai baht

appreciated 0.4%.

Annual inflation in the Philippines was likely within a

range of 8.5% to 9.3% in February, the country’s central bank

said on Tuesday, adding that it would continue to adjust its

monetary policy stance as necessary to prevent the further

broadening of price pressures.

Data showed China’s non-manufacturing activity grew at a

faster pace in February, while factory activity rose for the

first time in seven months as the country shook off its strict

COVID curbs.

“For now, the market is reminded that China’s recovery is

showing no signs of faltering,” said Eugenia Victorino, head of

Asia strategy at Skandinaviska Enskilda Banken.

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The yuan firmed 0.3%. Equities in Shanghai

advanced 0.9%.

“The data will provide some relief to global risk sentiment,

but it will be difficult to counteract the intensification of

negative sentiment amid higher for longer Fed rate

expectations,” said Mitul Kotecha, head of EM Strategy at TD

Securities.

A slew of upbeat U.S. economic data in recent weeks has

heightened expectations that the Fed would hike rates to a

higher level than market forecasts and keep them elevated for

longer than was initially expected.

Fed fund futures suggest rates peaking at around 5.4% by

September, with a chance of a 50 basis point hike in March.

“U.S. non-farm payrolls and CPI (consumer price index) reads

will be important to gauge the strength of U.S. demand, which

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could lead to USD/Asia resuming its appreciation path,” said Wei

Liang Chang, macro strategist at DBS Bank.

HIGHLIGHTS:

** The Philippine government posted a budget deficit of 1.6

trillion pesos for 2022

** India’s economic growth slowed further in the December

quarter as pent up demand eased and weakness in the

manufacturing sector continued

** Taiwan’s defense ministry said it had spotted 19 Chinese

air force planes in its air defense zone in the past 24 hours,

part of what Taipei calls regular harassment by Beijing

The following table shows rates for Asian currencies against

the dollar at 0343 GMT.

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY YTD %

%

Japan -0.10 -3.83 <.n2>

China EC>

India +0.36 +0.43 <.ns ei>

Indonesi -0.03 +2.07 <.jk a se>

Malaysia +0.04 -1.85 <.kl se>

Philippi +0.55 +1.18 <.ps nes i>

Singapor +0.11 -0.50 <.st e i>

Taiwan -0.44 +0.30 <.tw ii>

Thailand +0.43 -1.34 <.se ti>

(Reporting by Upasana Singh in Bengaluru; Editing by Christian

Schmollinger)

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