Philippines bucks Asia rally as new infections surge

-A +A

BENGALURU (July 6): Philippine shares weakened today, failing to catch a broader regional rally as a surge in new coronavirus cases in the Southeast Asian country sowed fears of fresh economic restrictions.

Stocks and currencies across Asia's emerging and developed markets were broadly higher, led by a 4% surge in China's main index that traders said was driven by the easy money still flooding the global financial system.

Yesterday, however, saw the biggest one-day jump yet in Covid-19 cases in the Philippines, crossing 2,000 a day for the first time and sending stocks there down 0.5%. The Health Ministry attributed the increase to more people coming in contact with one another as some restrictions were eased.

"The possibility of localised lockdowns and pullback in economic activity due to consumers mitigating exposure to the virus has the mood downbeat in the Philippine equity market," said Nicholas Mapa, ING's senior economist for the Philippines.

South Korea, Taiwan and Malaysian stocks all rose more than 1% on the back of the gains in Shanghai, while markets in India, Singapore and Indonesia also saw gains.

Investors have turned more bullish on Chinese stocks, with sizeable foreign inflows and massive margin borrowings last week highlighting hopes among investors of a sustained economic recovery and confidence in the government's ability to crush any resurgence of the virus.

The ringgit stuck to a tight range ahead of a central bank meeting tomorrow where interest rates may be cut by 25 basis points to their lowest ever, according to a slim majority of economists polled by Reuters. The yield on Malaysian 10-year bonds opened 2.1 basis points lower before rebounding back to levels close to last Friday's close. Shares were at their highest in nearly a month. Markets in Thailand were closed for a holiday.