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RPT-EMERGING MARKETS-Asia FX muted, stocks climb as investors weigh Russia-Ukraine risks

March 31, 2022By Reuters

(Repeats with no change to text)
* Rupee gains most among Asian FX
* Most currencies set for quarterly falls
* Oil slips, eases inflation pressures
* Singapore bonds edge lower

By Harshita Swaminathan
March 31 (Reuters) – Most Asian currencies were flat on Thursday, as investors weighed the impact of reports that Russian forces were moving to attack Ukraine’s Donbas region, a day after it promised to scale back military action in Ukraine.

Most emerging Asian currencies, including the Philippine peso and Malaysian ringgit saw subdued movement, moving less than 0.1% up or down, while the Indian rupee inched 0.2% higher. Attacks by Russia in Kyiv also continued, according to the city’s mayor, even after Russia said it will curtail operations near the Ukraine capital. “The ongoing hot and cool tone in the geopolitical conflict may continue to drive shifts in market sentiment as we edge closer to the weekend break”, says Yeap Jun Rong, a market strategist at IG. The Indian rupee , however, advanced on a lower oil price, but was on course for its worst quarterly drop since the first quarter of 2020. Oil prices have slid nearly 5% after reports that the United States may release oil from its strategic reserves for several months, to cool prices of the commodity. Malaysia’s ringgit ticked up marginally, but was set for a 0.9% drop this quarter. “Softer oil prices may have partially mitigated MYR gains”, analysts at Maybank said in a note, on the day’s moves. Indonesia’s rupiah , however, shed 0.1%, being a major oil exporter. Data also showed that factory and services activity in China contracted during March, the first contraction since the peak of the COVID-19 outbreak in February 2020, as pandemic-related curbs were reimposed in major cities including Shanghai and Shenzhen after infection rates rose sharply. “We think the data will add further pressure to ease policy,” analysts at TD Securities said. The United States also reported its final GDP data overnight, revising its fourth-quarter growth rate to 6.9%, down from an earlier estimate of 7.0%, while economists had expected an upward revision to 7.1%. Meanwhile, bond yields in Singapore egded lower for a second straight day, with yields on the 10-year bond shedding 30 basis points to 2.326%, while the 5-year bond shed 9 basis points to 2.301%. Benchmark bond yields in Indonesia also fell 19 basis points to 6.732%. Stocks across the region broadly remained firm, with most emerging equities continuing to climb for a second day. South Korean stocks led the pack, rising 0.4%, boosted by optimism that lower oil prices will ease inflation. Stocks in Malaysia and the Philippines rose between 0.2% and 0.3%. Singaporean stocks , however, lost 0.2%

** Healthcare sector leads gains among Malaysian stocks, with Top Glove and IHH Healthcare top gainers, up between 1.1% to 2.1%
** Financial sector leads gains on Indonesian stock index

Asia stock indexes and currencies at
0213 GMT
% %
Japan -0.32 -2.97
China -0.10 -10.35
India 0.29 1.13
Indonesia 0.20 7.39
Malaysia 0.29 1.30
Philippines 0.25 0.87
S.Korea 0.38 -7.40
Singapore -0.23 9.96
Taiwan -0.14 -2.77
Thailand -0.06 2.40

(Reporting by Harshita Swaminathan; Editing by Lincoln Feast)

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