Asian FX, stocks drop on new coronavirus variant concerns
* Risk-off sentiment weighs on regional stocks, FX
* Haven FX have outperformed at emerging FX's expense -
* Indian stocks hit lowest since Sept. 2
By Harish Sridharan
Nov 26 (Reuters) - Shares and currencies in Asia's emerging
markets fell sharply on Friday, as investors fled riskier assets
after the detection of a new and possibly vaccine-resistant
coronavirus variant, which in-turn strengthened safe-haven
assets like the dollar.
Indian stocks dropped more than 2% to hit their
lowest since early September, while shares in Taiwan,
South Korea, Singapore, Thailand and
Indonesia fell between 1.5% and 1.6%.
Scientists have said the new COVID-19 variant, detected in
South Africa, may be able to evade immune responses. British
authorities think it is the most significant variant to date and
worry it could make vaccines less effective and hurt efforts to
fight the pandemic.
"With the delta wave in mind from earlier this year,
investors are likely to shoot first and ask questions later
until more is known about it (the new coronavirus variant),"
Jeffrey Halley, senior market analyst, Asia Pacific, OANDA, said
in a note.
The news about the South African variant ramped up selling
pressure in regional markets, already reeling under broad dollar
strength due to bets that an increasingly hawkish U.S. Federal
Reserve will lift rates by the middle of next year.
"Risk-off trades owing to (the) new South African variant
scare was the dominant driver while (the) policy divergence
thematic takes a back seat," said Christopher Wong, senior FX
strategist at Maybank.
He added that if the new variant becomes a "real concern",
it would overshadow recent drivers including policy
Separately, a handful of local COVID-19 cases in eastern
China led to the closing of some tourist and public transport
activity, exarcebating risk-off sentiment in the broader region.
Shares in Shanghai fell 0.5%.
The Thai baht, Indonesian rupiah,
Singaporean dollar and South Korean won fell
0.3-0.7%, while the yuan, which has provided some
support to these currencies over the week, also weakened.
"Haven currencies have outperformed at the expense of
emerging and commodity/risk sentiment currencies," Halley added.
Virus woes have also raised concerns in South Korea, where
the health minister said the government is reviewing whether to
make changes to its 'living with COVID-19' policies, as cases
continue to rise.
The Philippine government said it would reopen its borders
to tourists from some countries on a trial basis from Dec. 1, as
part of efforts to rebuild an economy hit hard by the pandemic.
The country's benchmark stock index fell 1.2%.
** Thai baht leads losses among Asian FX
** Taiwan shares eye worst day since Oct. 1
** Singapore shares hit lowest since Oct. 18
Asia stock indexes and currencies at 0635 GMT
COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCK
DAILY % DAILY S YTD
% % %
Japan +0.74 -9.83 -2.53 4.76
China -0.09 +2.14 -0.51 2.67
India -0.25 -2.19 -2.00 22.92
Indonesia -0.49 -2.06 -1.63 10.22
Malaysia -0.38 -5.28 -0.42 -7.13
Philippines -0.12 -4.70 -1.23 1.94
S.Korea -0.26 -8.98 -1.47 2.19
Singapore -0.26 -3.67 -1.55 11.53
Taiwan -0.09 +2.36 -1.61 17.90
Thailand -0.71 -10.81 -1.47 12.07
(Reporting by Harish Sridharan in Bengaluru; Editing by Rashmi
First Published: 2021-11-26 04:10:21
Updated 2021-11-26 09:15:32
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