June 17, 2020 / 5:15 AM / 2 months ago

EMERGING MARKETS-Geopolitics, virus concerns hurt Asian stocks and FX

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * India says 20 soldiers killed in border clash with China
    * Tensions rise between North and South Korea 
    * India shares open lower

    By Nikhil Nainan
    June 17 (Reuters) - South Korea's won and Indian stocks led
losses in emerging Asian markets on Wednesday, as a resurgence
of coronavirus cases in Beijing and a border clash between China
and India unnerved investors.
    Tensions between nuclear-armed neighbours India and China
have escalated at a disputed border site after a weeks-long
standoff. India said on Tuesday 20 of its soldiers had been
killed in clashes with their Chinese counterparts.
    South Korean shares, supported by retail investor
buying, recouped early losses following heightened tensions on
the Korean peninsula after North Korea blew up a joint liaison
office set up in a border town.
    The won was the worst performer in emerging Asia,
but with losses below 1% against the dollar.
    In Southeast Asia, Malaysian equity markets fell
0.4%, while Thailand was down 0.2%.
    The pullback in markets reversed some of the previous day's
rally spurred by the start of the U.S. Federal Reserve's
corporate bond buying programme and a report the Trump
administration was preparing a nearly $1 trillion infrastructure
    India shares fell 0.6% in early trade. Both the
stock market and rupee had dipped on Tuesday when initial
details of the border clash emerged.
    "The worst is probably behind us, and there could be some
panic-stricken diplomatic action to ease the situation," said
Stephen Innes, the chief global market strategist at AxiCorp.
    DBS analysts said they expect the rupee to test an all-time
low it hit in April due to border tensions and the rising
coronavirus case count. 
    Abhishek Goenka, the CEO of Indian forex advisory services
firm IFA Global, said he expected state-run firms would supply
dollars to ease the strain on the rupee.
    In Indonesia, the rupiah was flat ahead of a central
bank meeting on Thursday at which rates are expected to be cut.
Southeast Asia's largest economy is facing its first contraction
in the second quarter since 1999 due to curbs to control the
spread of the coronavirus.    
             Asia stock indexes and currencies at 0403 GMT
 COUNTRY      FX          FX        FX       INDEX    STOCKS   STOCKS
              RIC         DAILY %   YTD %             DAILY %  YTD %
 Japan                    +0.04     +1.24             -0.85    -5.35
 China                    -0.10     -1.82             -0.10    -3.97
 India                    +0.00     -6.34             -0.56    -18.99
 Indonesia                +0.07     -0.93             -0.23    -21.04
 Malaysia                 -0.05     -4.40             -0.34    -4.79
 Philippines              -0.03     +1.00             0.40     -19.39
 S.Korea                  -0.78     -4.96             -0.03    -2.74
 Singapore                +0.01     -3.59             -0.13    -17.34
 Taiwan                   +0.25     +1.60             -0.04    -4.09
 Thailand                 -0.16     -3.92             -0.18    -13.55
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Jacqueline Wong)
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