Most Southeast Asian equity indexes were set to post monthly losses on Friday after witnessing a brutal sell-off in markets in recent weeks, while investors placed cautious bets ahead of an impending rate hike by the US Federal Reserve.
Stocks in the region, however, logged small gains on Friday, taking positive cues from an upbeat Wall Street session overnight with strong earnings reports lifting risk sentiment.
Equities in Singapore advanced 0.9 percent to touch their highest level since April 8 after earnings from top lenders DBS Group Holdings and OCBC beat estimates.
Stocks in Seoul also jumped 1 percent to a one-week high, helped by strong first-quarter earnings at Samsung Electronics and other major domestic companies.
Still, Singapore and South Korea benchmark indexes were set for monthly losses along with Taiwan and the Philippines. Stocks in Manila were set for a third consecutive monthly decline.
“Market dynamics this week reflected that recession fears are growing,” analysts at Barclays said in a note. “While recession concerns are still a potential risk, higher inflation is a fact, and policy response at the moment is aimed to tackle inflation.”
However, given doubts over economic growth in China after extensive lockdowns, as well as headwinds from the Russia-Ukraine conflict, global central banks face tough decisions on tapering monetary stimulus.
“Fears of too much monetary tightening triggering the next recession have markets observing higher volatility levels as we move closer to next week’s US Federal Reserve meeting,” Barclays analysts added.
Most Asian currencies were steady on Friday, with the South Korean won firming about 1.3 percent against the dollar.
The Malaysian ringgit, Singapore dollar and Philippine peso all firmed between 0.2 percent and 0.4 percent.
Markets in Indonesia were closed due to a public holiday. — Reuters
