South-East Asia stocks-largely up on French election relief rally; Indonesia hits record high
Most South-east Asian shares rose on Tuesday with Indonesia hitting a record high as regional markets joined a relief rally in global stocks after a centrist victory in the first round of the French presidential election saw renewed appetite for risky assets. Global stocks started off the week with gains after Emmanuel Macron, who is anti-Frexit, won the first round of the French election on Sunday, while safe-haven assets including the yen and gold remained under pressure.
“Asian markets appear to be still lingering in the glow of relief after the French election. The jubilance in markets overnight has also added to the optimism,” said Jingyi Pan, market strategist at IG in Singapore.
Indonesia opened at an all-time high, but pared gains to trade marginally lower while Philippine shares gained the most in the region, touching their highest level in six months with consumer and utility stocks driving the index. An index of Indonesia’s 45 most liquid stocks was down 0.2 percent. However, investors are keeping a close watch on key global events for fresh cues that could determine the near-term trend.
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“For Asian markets, event risks lie ahead, though the imminent event in the form of President Donald Trump’s tax announcement provides an upside bias for markets,” Pan added. U.S. President Donald Trump’s tax reform announcement on Wednesday will be keenly watched as he is expected to cut corporate income tax rate to 15 percent from 35 percent.
Further, North Korea’s possible launch of missiles to mark the 85th Anniversary of the Korean People’s Army on 25th April, may continue to weigh. Malaysian stocks climbed to their highest in two years with retail banking company AMMB Holdings, up as much as 3.5 percent, and property investor PPB Group, up 1.8 percent, leading the gains. “With the ringgit at an attractive level, foreign funds are slowly putting Malaysia back into their radar,” said Danny Wong, chief executive officer of Areca Capital.
(Reporting by Susan Mathew in Bengaluru, additional reporting by Nichola Saminather and Liz Lee; Editing by Vyas Mohan)