Asian stocks, FX gain as Biden-Xi phone call lifts sentiment

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A surge in Taiwan and Singapore

currencies bolstered emerging Asian forex markets on Friday, as

investors viewed a phone call between U.S. President Joe Biden

and China’s premier Xi Jinping as a potential precursor to

easing strained relations.

Equities in the broader region also rose, recouping some

losses incurred this week, with Taiwan and Singapore

adding 1% and 0.8%, respectively.

Biden spoke by phone with Xi for about 90 minutes, a senior

U.S. official said, with both leaders discussing the need to

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avoid letting competition between the world’s two largest

economies veer into conflict.

“Markets weren’t expecting Biden and Xi to actually speak

until the G-20 summit later in the year,” said Khoon Goh, head

of Asia research at ANZ Banking Group (Singapore).

“Markets are taking this as a hopeful sign that maybe we

could see toning down of recent tensions.”

Sino-U.S. relations deteriorated to their lowest point in

decades due to a long-drawn trade war and COVID-19-related

tensions, especially during the preceding Donald Trump

administration. The Biden-Xi conversation was only the second

call between the leaders since Biden took office in January.

Analysts at Maybank, however, said that “spillovers to

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sentiments could be constrained without more discernible

translation to policy changes.”

Stocks in China, rose 0.3%, notching their highest

since mid-February, while equities in Philippines added

0.7% to close at its highest since July 7.

The rupiah, the Taiwanese dollar, the

Malaysian ringgit and the Singaporean dollar added

between 0.2% and 0.3%, while other regional currencies saw

modest gains.

Malaysian shares dipped a day after the country’s

central bank held its benchmark interest rate at a record low,

expecting progress in the coronavirus vaccination rate and the

gradual easing of anti-COVID curbs to underpin growth.

HIGHLIGHTS

** Indonesian 10-year benchmark yields are down 3.4 basis

points at 6.157%

** Top gainer on the Singapore STI was Mapletree

Industrial Trust, up 2.47%

** Markets in India are closed for a public holiday

Asia stock indexes and currencies at 0652 GMT

COUNTRY FX RIC FX FX INDEX STOCKS STOCK

DAILY YTD % DAILY S YTD

% % %

Japan -0.22 -6.09 1.25 10.70

China +0.20 +1.32 0.31 6.66

Indonesia +0.18 -1.30 0.47 1.96

Malaysia +0.19 -2.85 -0.22 -3.18

Philippines +0.14 -3.73 0.67 -2.37

S.Korea +0.01 -7.09 0.36 8.78

Singapore +0.22 -1.43 0.78 8.85

Taiwan +0.29 +2.93 0.98 18.61

Thailand +0.15 -8.24 -0.02 12.38

(Reporting by Harish Sridharan in Bengaluru; editing by

Uttaresh.V)