Thai baht, Malaysian ringgit lead Asian FX gains; stocks slip

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The Thai baht and the Malaysian ringgit

firmed on Thursday as Asian currencies benefited from receding

worries surrounding the Omicron coronavirus variant, although

most stock markets dipped in the last trading session of the

year for several exchanges.

Despite a surge in global COVID-19 infections, investors

seemed to focus more on positive news about the Omicron variant.

Researchers in South Africa found that T cells, a key part

of the immune system’s second-line defense, are highly effective

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at recognizing and attacking the Omicron strain, preventing most

infections from progressing to critical illness.

The ringgit and the baht firmed 0.3% each,

the Indian rupee rose 0.2%, while most other currencies

pared gains to trade flat but eyed a stronger weekly finish.

“One would have to say that the renewed risk appetite from

international investors is being most strongly expressed in

regional Asian currencies at the moment,” said Jeffrey Halley,

a senior market analyst, Asia Pacific OANDA.

“Asian (stocks) are having a mixed day in contrast, and it

appears that some pre-New-Years-Eve book squaring is weighing on

markets.”

Bangkok shares edged higher, while Malaysia,

Jakarta and Singapore shed between 0.1% and 0.3%,

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in a low-volume session.

Thursday was also the last trading day for currency and

stock markets in Thailand, Taiwan and Indonesia, while Singapore

will see a shortened session on Friday.

The baht was set to end the year as the worst-performing

Asian currency with a 10.3% drop due to a delayed recovery in

tourism, a key source of revenue for the Thai economy. It would

be the currency’s second consecutive year of losses.

The South Korean won traded flat after having hit

a two-week high earlier in the session, while stocks

fell 0.5%. The won closed down 8.6% for the year, while shares

added 3.6%.

However, the Asian trade bellwether’s November industrial

output left something to cheer for as it indicated global chip

shortage was easing, with Barclays analysts optimistic that

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supply-side bottlenecks could see a meaningful resolution in

2022.

Chinese shares rebounded from a near 1% drop in the

previous session, fueled by gains in the tech sector even as

the pandemic situation in the country worsened.

Philippines equity markets were closed for a holiday

and will resume trade on Friday.

HIGHLIGHTS

** Indonesian rupiah among best performing currencies

in 2021, eyes closing down 1.6% versus dollar; stocks up more

than 10% in 2021

** Thai stocks set for ~14% gain, rebounding from an 8% drop

last year, while Taiwan equities head for ~24% rise to

be the best performer

** The Chinese city of Xian, in its eighth day of lockdown,

reported another 155 local COVID-19 cases, taking the total

number to its highest seen in any city in the country this

year

Asia stock indexes and currencies at 0639 GMT

COUNTRY FX RIC FX DAILY % FX YTD % INDEX STOCKS DAILY % STOCKS YTD %

Japan -0.18 -10.34 -0.40 4.91

China -0.01 +2.51 0.60 4.19

India +0.19 -2.05 0.09 23.23

Indonesia -0.13 -1.60 -0.01 10.38

Malaysia +0.22 -3.62 -0.29 -5.32

Philippines +0.00 -5.92 — 2.73

S.Korea -0.19 -8.63 -0.52 3.63

Singapore -0.07 -2.38 -0.19 10.14

Taiwan +0.03 +2.90 -0.16 23.66

Thailand +0.42 -10.16 0.22 14.32

(Reporting by Anushka Trivedi in Bengaluru; Editing by

Subhranshu Sahu)