Thai stocks set for weekly fall on political instability, other Asian markets gain

By Ayushman Ojha and Adwitiya Srivastava

Aug 16 (Reuters) –Political instability set Thai stocks on track for a second weekly decline on Friday, but most other Asian currencies and stocks headed for weekly gains as investors shrugged off recession fears in the United States.

Equities in Thailand .SETI were up 0.6%, but still headed for a weekly fall of 0.6%, having lost nearly 9% this year, while the baht THB=TH edged 0.1% lower.

Political newcomer Paetongtarn Shinawatra won parliament’s backing to become Thailand’s youngest prime minister two days after the Constitutional Court dismissed Prime Minister Srettha Thavisin for ethics violations.

The daughter of divisive political heavyweight Thaksin Shinawatra, Paetongtarn will lead a country where a tumultuous cycle of coups and court rulings has toppled governments.

Pressure on other Southeast Asian stocks and currencies eased after last week’s market turmoil triggered by recession fears.

The Philippine peso PHP= was largely unchanged but set for its sixth straight weekly gain, a day after the central bank cut its benchmark borrowing rate by 25 basis points, in the first rate cut since Nov. 2020.

The central bank has room for one more cut this year, its governor said.

Stocks in Manila .PSI rose as much as 2.3% to their highest since early April, and were set for a 3% weekly gain.

“It (one more cut) is entirely plausible because their inflation data is going to drop really quite meaningfully over the next couple of months,” said Robert Carnell, regional head of Asia Pacific research at ING.

In Indonesia, markets await the central bank’s monetary policy meeting next week, where Bank Indonesia (BI) is expected to keep interest rates on hold to support the rupiah, a Reuters poll found.

“While there is a unanimous view of consensus economists that the BI will not cut rates next week, I just think you wouldn’t rule it out,” Carnell added.

Shares in Jakarta .JKSE were up 0.5%, set for their best week since the start of July, while the rupiah IDR= inched 0.2% lower, but was on track for its third weekly gain.

Malaysian data showed that gross domestic product in the second quarter of 2024 expanded by slightly more than expected. The central bank said growing expectations of U.S. policy rate cuts alleviated pressure on regional currencies.

The benchmark .KLSE jumped 0.4%, set for its best weekly gain in four, while the ringgit MYR= inched lower by 0.1%.

Elsewhere, Singapore stocks .STI added 1.1%, while stocks in Taiwan .TWII rose as much as 2.2% to hit highest level since August 1.

HIGHLIGHTS:

** Thai industrial sentiment rises for first time in 4 months in July

** Singapore’s July exports rise 15.7% y/y, stronger than forecast

Reporting by Adwitiya Srivastava in Bengaluru; Editing by Clarence Fernandez