Taiwan stocks closed 5.2 per cent higher, while markets in neighbouring Japan, which is dealing with a resurgence in Covid-19 cases and slow vaccination drive, jumped 2.1 per cent. South Korea and Singapore climbed more than 1 per cent each.
While much of the Western world eased restrictions, many Asian countries imposed tighter curbs as fresh cases emerge while governments struggle to ramp up their vaccination programmes.
Singapore and Taiwan, hailed for their past success in taming the spread of the virus, tightened curbs again recently, with their stock markets losing 4.3 per cent and 10.4 per cent this month, as of Monday’s close.
Foreign investors took advantage of the previous session’s drop to pile into Taiwanese stocks, offering a lift to overall consumer confidence, analysts said. “However, the key indicator going forward will still be on how the pandemic develops,” Capital Futures Corp analyst Yeason Jung said.
So far Singapore has been among the fastest in the region to inoculate its population, while Capital Economics says “Taiwan has plenty of fiscal firepower” and expects support measures to be announced soon.
With reported cases under 300,000 for a second straight day in India, the country’s benchmark Nifty 50 index hit its highest in more than two months and the rupee strengthened 0.3 per cent.
The South Korean won alongside the Taiwan and Singaporean dollar led gains in the region’s currencies ahead of minutes on Wednesday from the Federal Reserve’s most recent meeting, which may give clues about where monetary policy is headed this year.
Comments by Dallas Fed Bank President that he did not expect interest rates to rise until next year reassured markets that the central bank would not tighten early, keeping the dollar lower against most major currencies.
However, stocks markets in the developing economies of Indonesia, Malaysia, and the Philippines were trading lower as worries over the health crisis and its impact on their economies remained intact.
The rupiah weakened 0.1 per cent, while benchmark 10-year bond yields edged higher. Malaysia, which is under a national lockdown, reported its deadliest day on Monday, while fears rise that mass gatherings in Indonesia over Eid could trigger a surge of new cases.
