Indonesia, Philippine shares hit early 2021 highs on Wall Street rebound

[BENGALURU] Stocks in Indonesia and the Philippines hit multi-month peaks on Wednesday, leading other Asian emerging markets higher as a rebound in global sentiment helped offset broader worries about elevated inflation and the Federal Reserve's tapering timeline.

Rising oil, petrol and coal prices also boosted energy stocks on the Malaysian stock market, driving the index around 1 per cent higher, with oil services firm Dialog Group and Petronas Chemicals among the top gainers.

Emerging Asian stocks tracked a rebound on Wall Street overnight after tech stocks recovered from Monday's sell-off as US Treasury yields rose on concerns about inflation, the timing of Fed tapering and the US government's ability to raise the debt ceiling.

Stocks in Jakarta rose as much as 2.4 per cent to their highest since January, having rallied around 4 per cent since the end of September.

In the Philippines, shares jumped 1.3 per cent to their highest since mid-February. Globe Telecom rose over 9 per cent to a record high, having rallied more than 25 per cent since the end of August as it expands its fibre rollout and gains revenue share from rivals.

On the currency front, however, Asian units dipped against a firmer dollar, which inched higher ahead of US jobs data this Friday that may offer more insight into the timing of the Fed's plans to tighten policy.

Reaction among Emerging Asian currencies has been fairly muted to the September announcement that the Fed would likely begin reducing its monthly bond purchases as soon as November.

In the so-called "taper tantrum" of 2013, a Fed announcement that it would begin cutting back on bond purchases led to a sharp sell-off in risk-sensitive emerging market currencies.

"The expected tantrum of taper this time is over-hyped," said Kunal Kundu, an economist with Societe Generale.

"The tantrum in 2013 was because of the suddenness of the announcement on an absolutely unprepared market. This time, the market is actually expecting a taper," he said, adding the Fed's communication has ruled out any surprise.

The Reserve Bank of New Zealand lifted its official cash rate for the first time in seven years on Wednesday, as developed economies begin to unwind pandemic-era monetary policy.

Chinese markets remained closed for a holiday.

REUTERS