Emerging Markets-Indonesian rupiah extends rally; Asian AI stocks rise after weaker U.S. jobs data

MSCI's gauge of EM Asia stocks `.MIMS00000PUS` rose about 1%, while the EM Asia IT index `.MIMS0IT00PUS` added 1.4%. Both indexes are heavily influenced by South Korea's KOSPI `.KS11` and Taiwan's benchmark `.TWII` — up 0.6% and 1.7%, respectively. Most Asian equities found support as a soft U.S. jobs report on Friday led to some pricing out of a near-term rise in borrowing costs, even as lack of progress in Gulf peace talks meant that oil prices crept higher. O/R South Korea's KOSPI `.KS11` gained as much as 2.2% on Monday, recovering part of last week's more than 5% slide. Top memory chipmakers Samsung Electronics `005930.KS` and SK Hynix `000660.KS` gained as much as 3.3% and 4.6% respectively. Taiwan's equity benchmark `.TWII` jumped as much as 2.2% to its highest level in nearly three weeks, helped by gains in the world's top contract chipmaker TSMC `2330.TW`. Thai stocks `.SETI` rose 0.8%, while benchmarks in Kuala Lumpur `.KLSE` and Manila `.PSI` slipped about 0.2% each. Regional currencies carved out marginal gains as investors awaited U.S. inflation data later in the week that could offer clues on the Federal Reserve's policy trajectory. Under Chair Kevin Warsh, the Federal Reserve has provided little forward guidance on monetary policy, leading markets to focus more on economic data and commentary from policymakers. The Thai baht `THB=TH` strengthened to 32.975 per dollar, its highest level since June 23, from its last close of 33.05. The Philippine peso `PHP=` rose 0.1% to 60.752 per dollar. Singapore stocks were closed for trading for a market holiday. HIGHLIGHTS: * BOJ's debate on faster hikes bolsters September rate move odds * Westpac reports 20% drop in mortgage applications after Australia scraps tax breaks * Taiwan simulates repelling Chinese assault, to slow mobile internet in annual war games | Country | FX Daily % | FX YTD % | Index | Stocks Daily % | Stocks YTD % | | --- | --- | --- | --- | --- | --- | | Japan | -0.30 | -1.02 | `.N225` | 2.00 | +29.02 | | China | -0.01 | +3.58 | `.SSEC` | 0.20 | -0.53 | | India | -0.02 | -5.63 | `.NSEI` | -0.18 | -6.14 | | Indonesia | +0.36 | -6.45 | `.JKSE` | -0.09 | -25.94 | | Malaysia | +0.02 | -0.76 | `.KLSE` | -0.15 | 3.15 | | Philippines | +0.12 | -3.21 | `.PSI` | -0.15 | 3.77 | | S. Korea | -0.38 | +1.74 | `.KS11` | 0.59 | 49.40 | | Singapore | -0.12 | +0.48 | `.STI` | -- | 22.65 | | Taiwan | +0.20 | -2.44 | `.TWII` | 1.73 | 55.34 | | Thailand | +0.14 | -4.65 | `.SETI` | 0.83 | 29.03 | (Reporting by Nichiket Sunil and Kumar Tanishk in Bengaluru; Editing by Ronojoy Mazumdar) The Indonesian rupiah extended its rally to a fourth session on Monday on a supportive domestic growth outlook, while most Asian stock markets rose after last week's U.S. jobs data reduced expectations of a rate hike by the Federal Reserve. The rupiah `IDR=` strengthened to 17,800 a dollar, a level last seen on June 22, before paring gains to trade at 17,813. The currency has appreciated about 1% since data last week showed that Indonesia's annual economic growth beat forecasts in the second quarter at 5.3%, though this still marked its weakest pace in three quarters. "If Indonesia can maintain growth above 5% while keeping inflation contained, that should provide a relatively constructive backdrop for the rupiah," said Glenn Yin, director of research at ACCM Official. "A softer US dollar, shifting Fed expectations and improving sentiment toward emerging Asian assets are also important drivers."

Emerging Markets-Indonesian rupiah extends rally; Asian AI stocks rise after weaker U.S. jobs data

Asian equities and AI stocks rise

Regional currencies and market snapshot

Rupiah extends rally on stronger growth outlook

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Country	FX Daily %	FX YTD %	Index	Stocks Daily %	Stocks YTD %
Japan	-0.30	-1.02	`.N225`	2.00	+29.02
China	-0.01	+3.58	`.SSEC`	0.20	-0.53
India	-0.02	-5.63	`.NSEI`	-0.18	-6.14
Indonesia	+0.36	-6.45	`.JKSE`	-0.09	-25.94
Malaysia	+0.02	-0.76	`.KLSE`	-0.15	3.15
Philippines	+0.12	-3.21	`.PSI`	-0.15	3.77
S. Korea	-0.38	+1.74	`.KS11`	0.59	49.40
Singapore	-0.12	+0.48	`.STI`	--	22.65
Taiwan	+0.20	-2.44	`.TWII`	1.73	55.34
Thailand	+0.14	-4.65	`.SETI`	0.83	29.03