Malaysia shares weaken ahead of c.bank rate decision

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Malaysian shares dropped nearly 1% on

Thursday ahead of a central bank meeting at which it is expected

to hold interest rates, while South Korean shares eyed their

worst day in three weeks after policymakers there hinted at

further tightening.

Equities in the broader region came under pressure following

a weaker overnight session on Wall Street, as cautious sentiment

stemmed from worries that the Delta coronavirus variant could

blunt the economy’s recovery.

A survey conducted by Reuters showed that the Bank Negara

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Malaysia is likely to leave its key interest rate unchanged at

1.75%, as Malaysia gradually reopens its economy amid a

ramped-up COVID-19 vaccination drive.

Shares in Kuala Lumpur dropped 0.8%, their biggest

fall since Sept. 1, while the ringgit gained 0.1%.

“With a macroeconomic policy focus on supporting economic

recovery and given low and stable core inflation, our house view

expects the overnight policy rate (OPR) to stay at the current

record low until end-2021,” analysts at Maybank said in a note.

The Bank of Korea said in a monetary policy report that

raising rates should help slow the pace of household debt growth

going forward, and reiterated that it will continue to tighten

policy as inflationary pressures persist.

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Stocks in Seoul dropped as much as 1.5% and were on

course for their worst session since Aug. 19. The won

weakened 0.4%.

Most other currencies in the region logged gains, with the

Philippine peso, Taiwanese dollar and Thai baht

up modestly, even as the U.S dollar firmed.

In the Philippines, government data showed the trade deficit

remained above $3 billion for a fourth consecutive month in

July, as imports rose faster than exports. Stocks in Manila

dropped 0.4.

Separately, China’s factory gate inflation hit a 13-year

high in August driven by roaring raw materials prices despite

Beijing’s attempts to cool them, further pressuring

manufacturers in the world’s second-largest economy.

HIGHLIGHTS

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

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points at 6.186%​​

** Top loser on FTSE Bursa Malaysia Kl Index was

MISC Bhd, down 4.38%

** Taiwan shares down 0.1%, eye fourth consecutive session

of losses

Asia stock indexes and

currencies at 0428 GMT

COUNTRY FX RIC FX FX INDEX STOCKS STOCK

DAILY YTD % DAILY S YTD

% % %

Japan +0.05 -6.30 -0.80 9.10

China -0.01 +1.03 0.09 5.92

India 0.00 -0.73 -0.22 23.84

Indonesia -0.11 -1.58 -0.29 0.50

Malaysia +0.14 -3.06 -0.82 -2.62

Philippines +0.17 -4.07 -0.37 -3.02

S.Korea -0.35 -7.23 -1.31 8.64

Singapore -0.02 -1.84 0.14 8.06

Taiwan +0.06 +2.72 -0.01 17.21

Thailand +0.00 -8.52 -0.16 13.00

(Reporting by Harish Sridharan in Bengaluru)

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