Markets & Finance News

Round-up of South Korean financial markets:

Asian stocks reversed earlier gains on Tuesday, dragged down by declines in Chinese markets, which were jolted by a new round of sanctions, after ebbing inflation fears had helped shore up broader sentiment in the region.

* Fitch affirms Indonesia credit ratings (Updates with comments from news conference, economist, context)

Japanese shares snapped early gains to end lower on Tuesday, tracking lacklustre performance in Chinese markets as investors locked in profit on a recent rally in some mainland firms, while the volatility of U.S. bond yields also dampened risk appetite.

China's yuan weakened on Tuesday on lower appetite for the currency after Western governments imposed sanctions on Chinese officials over human rights abuses in Xinjiang and as the dollar remained near recent highs. The United States, the European Union, Britain and Canada are seeking to hold Beijing accountable for mass detentions of Muslim Uighurs in the Xinjiang region of the country's northwest, where the U.S. says China is committing genocide. China denies all accusations of abuse and responded to the new sanctions with its own punitive measures. The spot yuan opened at 6.5075 per dollar, but eased to 6.5098 by midday, 14 pips softer than Monday's late-session close. Qi Gao, Asia FX strategist at Scotiabank, said the imposition of sanctions was the primary driver of the yuan's weakness. The currency's dip came despite the People's Bank of China setting a firmer daily midpoint rate at 6.5036 per dollar, from 6.5191 on Monday. "Market risk sentiment hasn't been very good recently, and risky currencies have depreciated, which may drive the yuan to weaken," said a trader at a Chinese bank, adding that corporate demand for dollar selling is muted. The offshore yuan eked out a 4 pip gain against the dollar by midday, firming to 6.5056 per dollar. Traders said they continue to see support for the dollar, as a firming U.S. recovery lifts yields and boosts the attractiveness of the greenback. Congressional testimony by Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen is expected to provide more indications of U.S. officials' tolerance for higher yields. The global dollar index edged up to 91.818 from the previous close of 91.798. But most expect the yuan to resume its slow march higher. "We think the impact (of sanctions on the yuan) is temporary and will not be sustainable," said Scotiabank's Gao. Gao expects the yuan to strengthen to 6.40 per dollar by the end of the year, supported by an improving global outlook, more portfolio and direct investment inflows to China and U.S.-China relations staying "under control". The yuan market at 4:00 A.M. GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.5036 6.5191 0.24% Spot yuan 6.5098 6.5084 -0.02% Divergence from 0.10% midpoint* Spot change YTD 0.28% Spot change since 2005 27.14% revaluation Key indexes: Item Current Previous Change Thomson 96.85 96.84 0.0 Reuters/HKEX CNH index Dollar index 91.818 91.798 0.0 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.5056 0.06% * Offshore 6.6863 -2.73% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Andrew Galbraith in Shanghai; Editing by Christian Schmollinger)

The dollar hovered below recent peaks on Tuesday as investors looked to U.S. policymakers for clues on whether they may seek to slow rising yields, while the New Zealand dollar dropped after housing reforms cooled policy-tightening expectations.

Most emerging Asian stocks inched higher on Tuesday, tracking the risk appetite recovery on Wall Street as bond yields pulled back, even as investors avoided making big bets ahead of testimony by top U.S. policymakers later in the day. The market's immediate focus remained on the Congressional testimony by U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen, expecting comments on the rise of bond yields. Yellen is likely to paint an optimistic picture for the U.S. economy as it emerges from the pandemic, telling U.S. lawmakers that she sees both growth and possibly full employment next year. Movements, however, were range-bound, as investors kept a close eye on rising COVID-19 cases in Europe, with lockdowns being reintroduced in Italy, France and Germany. The Philippine benchmark, which has shed nearly 4% in last two sessions, climbed 0.5% in a move attributed by analysts to bargain hunting. The property sector is also helping drive the bounce, with investors reportedly encouraged by repeated pushback from authorities about hard lockdowns, said ING economist Nicholas Mapa. The country's central bank is expected to leave its benchmark interest rate unchanged on Thursday, a Reuters poll showed. Singapore bourse added 0.2%, ahead of the release of data likely showing an uptick in February CPI inflation figures. "The figures will reveal the impact of the 21% hike in the petrol duty announced in the FY2021 Budget", wrote ING analyst Prakash Sakpal. "In addition, the seasonal increase in demand during the Chinese New Year holiday will pressure inflation higher." Boosting the benchmark, shares of Singapore's largest developer CapitaLand rose as much as 21% in morning trade after the company unveiled a major business restructuring plan, under which it plans to split in two. Taiwan's benchmark gained 0.2% and the Taiwan dollar strengthened after the country's February export orders rose more than expected for the 12th month in a row to a record high on Monday. Elsewhere, the currencies presented a mixed front as the U.S. dollar hovered below recent highs. The Philippine peso and Thai baht weakened 0.2% and 0.1% respectively against the dollar. On the other hand, the South Korean won added 0.1%. Highlights: ** Top losers on FTSE Bursa Malaysia Kl Index include Genting Bhd; Genting Malaysia Bhd; Dialog Group Bhd ** Thailand's 10-year government bond yields are down 4.5 basis points at 1.725% Asia stock indexes and currencies at 0413 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY YTD % DAILY YTD % % % Japan +0.11 -5.03 -0.10 6.19 China <CNY=CFX -0.03 +0.28 -1.19 -2.03 S> India +0.00 +0.97 0.66 6.09 Indones -0.03 -2.53 -0.19 5.19 ia Malaysi -0.02 -2.26 -0.69 -1.33 a Philipp -0.13 -1.16 0.45 -10.02 ines S.Korea <KRW=KFT +0.12 -3.63 -0.26 5.36 C> Singapo -0.01 -1.46 0.24 10.26 re Taiwan +0.07 +0.04 0.20 10.11 Thailan -0.13 -3.20 0.07 8.15 d (Reporting by Shruti Sonal in Bengaluru. Editing by Gerry Doyle)

Indonesia's gross domestic product is expected to contract between 1.0% to 0.1% in the first quarter from a year earlier, marking an improvement from a 2.2% contraction in the fourth quarter as consumption recovers, the finance minister said.

The New Zealand dollar on Tuesday hovered near its lowest levels this year as investors bet measures to cool its red-hot housing market will lessen the likelihood of rate hikes, while continued weakness in commodity markets hit the Aussie dollar.

Asian stocks reversed earlier gains on Tuesday, weighed by Chinese markets as investors took profit on a recent rally in some mainland firms, although ebbing inflation fears helped shore up broader sentiment in the region.