June 30, 2020 / 8:00 AM / 14 days ago

EMERGING MARKETS-Asian stocks rise on upbeat China PMI, currencies restrained

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3f2vwbA
    * Most Asian stocks up, but pull back slightly from early
    * Strong USD keeps Asian FX under pressure
    * Political tensions, rising COVID-19 cases a big risk

    By Rashmi Ashok
    June 30 (Reuters) - Asia's emerging stock markets rose on
Tuesday, boosted by encouraging China manufacturing activity
that offered some hope for a recovery in the world's
second-largest economy, while modest gains in the U.S. dollar
kept regional currencies under pressure.
    Data on Tuesday showed Chinese factory activity expanded at
a stronger pace in June as the economy continued to recover
after the government lifted strict lockdowns and ramped up
    While Asian stock markets benefited, currencies shed early
gains as the U.S. dollar strengthened during the day to
add 0.3% against a basket of currencies. 
    For the quarter, however, most emerging Asian currencies
were set to clock gains, led by the Indonesian rupiah
with a near 13% rise followed by the Thai baht - up
almost 6% so far.
    Analysts sounded a note of caution about Tuesday's equity
gains, saying underlying troubles relating to a jump in
coronavirus cases and political ructions still posed a risk to
    China's parliament passed national security legislation for
Hong Kong, which is set to give Beijing more control over the
financial hub. Details on the law are expected later in the day.

    The United States, in response, began eliminating Hong
Kong's special status under U.S. law that gives it various
privileges not afforded to the mainland. 
    "Nothing in the world has materially changed, but the urge
to keep the party going rolls on," wrote Jeffrey Halley, senior
market analyst at OANDA.
    "Hong Kong concerns though, are likely to be on top of
investors' minds. It has the potential to deliver some
potentially negative headlines later in the session."
     The rupiah widened initial losses to fall 0.5%, a day after
its finance minister said the government may sell low-yielding
bonds to the central bank through private placement to help
finance a ballooning fiscal deficit.
    Indian stocks were among the smallest gainers in the
region, after the country on Monday banned a large number of
Chinese mobile apps in its strongest move yet targeting China in
the online space since a border crisis erupted between the two
countries this month.
    ** Brokerages positive on Singapore Exchange's acquisition
of BidFX
    ** Top gainers on Singapore STI included Capitaland
Ltd, which rose 3.2% and Singapore Exchange Ltd
, adding 2.6% 
    ** Indonesian 10-year benchmark yields were down 2.2 basis
points at 7.21%​​, while Malaysia's 10-year benchmark yield
climbed 0.8 basis points to 3.057%​​ 
  Asia stock indexes and                                   
 currencies at   0703 GMT                            
                     DAILY        %               S   YTD %
                         %                    DAILY  
 Japan               -0.08    +0.89            1.33   -5.78
 China    <CNY=CFX   +0.15    -1.50            0.70   -2.22
 India               +0.08    -5.49            0.29  -15.01
 Indones             -0.49    -2.53            0.11  -22.10
 Malaysi             +0.02    -4.48            0.56   -5.41
 Philipp             -0.28    +1.62            1.68  -20.57
 S.Korea  <KRW=KFT   -0.37    -3.87            0.71   -4.07
 Singapo             -0.17    -3.69            0.90  -19.41
 Taiwan              +0.45    +2.09            0.68   -3.13
 Thailan             -0.06    -3.17            1.48  -14.58
 (Reporting by Rashmi Ashok in Bengaluru; Editing by Bernard
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