LONDON: Emerging Asian stock markets rallied on Tuesday, with Bangkok and Manila trading higher on expectations of rate cuts in the near future, while Singapore stocks hit a 17-year high.
Thailand stocks gained as much as 1.3 per cent to hit their highest since Nov. 8, after third-quarter economic growth data highlighted slowing private consumption, ramping up pressure on the central bank to lower interest rates.
Analysts at TISCO Securities expect the Bank of Thailand to stay pat on rates in December.
However, they see a high chance of a 25-basis-point rate cut in the first quarter of next year.
Philippine stocks rose as much as 1.1 per cent to hit their highest since Nov. 12, after the central bank governor said Bangko Sentral ng Pilipinas (BSP) was on course for more rate cuts.
The peso was trading flat.
BSP Governor Eli Remolona told reporters that a third rate cut was likely either at the central bank's December meeting or at its first meeting next year, and further reductions beyond that could be expected in 2025.
Citi analysts expect a 25-bp easing in borrowing costs in December and a total of 75 bps of rate cuts over the course of next year.
Losses in stocks and currencies in developing nations around the world, and especially in emerging Asia, had widened since Donald Trump won the U.S. presidential election, as traders weighed his touted policies of tariffs and the dollar rallied on expectation of slow interest rate cuts.
Singapore shares hit their highest in 17 years, led by financials.
Analysts expect Southeast Asia's top performing stock market in 2024 to continue its momentum next year as the central bank unveils stimulus measures to further boost the market.
The city-state's Straits Times Index rose as much as 0.9 per cent, while the Singapore dollar was trading unchanged.
"New measures to strengthen Singapore's equities market will be announced in phases through 2025, likely delivering a much needed boost to trading liquidity and valuation multiples," Morgan Stanley analysts said in a note.
Among other stock markets, Taipei recouped Monday's losses and was trading 1.3 per cent higher, while Jakarta and Mumbai gained 1.1 per cent and 1.3 per cent, respectively.
Currencies in developing nations were mostly upbeat, with the Malaysian ringgit, Indonesian rupiah and South Korean won gaining 0.3 per cent, 0.2 per cent and 0.2 per cent, respectively.