EMERGING MARKETS-Taiwan, South Korea lead equities lower ahead of central bank meets

MSCI EM Asia stocks hit lowest since Nov 25 South Korea stocks down as much as 1.9% Taiwan stocks hit lowest level in over two weeks Malaysia ringgit hovers around March 2021 highs Focus on c.banks in Taiwan, Indonesia, and Thailand By Roshan Thomas Dec 16 (Reuters) - Tech-heavy stock markets in South Korea and Taiwan slipped about 2% on Tuesday, pushing emerging Asia equities to their lowest in three weeks, as investors turned cautious ahead of central bank decisions, U.S. economic data and year-end holidays. An MSCI gauge of emerging Asian equities (.MIMS00000PUS) fell 1.6% to its lowest since November 25. Benchmarks in South Korea (.KS11) and Taiwan (.TWII) shed about 1.8% each on concerns about the future of AI-related companies. The two tech-heavy East Asian countries make up more than a third of the broader MSCI index. Korean chipmakers Samsung Electronics (005930.KS) and SK Hynix (000660.KS) fell 1.6% and 3.1%, respectively, while battery maker LG Energy Solution (373220.KS) slid 5.5%. Taiwan stocks (.TWII) fell to their lowest level since December 1, weighed down by losses in contract chipmaker TSMC (2330.TW) , which shed 1.7%. In Southeast Asia, Singapore’s Straits Times Index (.STI) briefly crossed the 4,600 mark for the first time in early trading, but reversed course to trade marginally lower by mid-day. Indonesia’s benchmark gauge (.JKSE) edged lower but remained around 140 points shy of its lifetime high of 8,776.970 points. Stocks in Malaysia (.KLSE) and the Philippines (.PSI) rose up to 0.5%, with the former touching an over two-month high. Market attention is fixed on the central banks’ final monetary policy meetings of the year in Taiwan, Indonesia, and Thailand. Economists polled by Reuters predict no change in interest rates for Indonesia and Taiwan, but they anticipate a quarter-point rate cut from the Bank of Thailand to boost growth. (POLL/) Bank Indonesia is expected to keep interest rates unchanged, “a move that should limit any significant market impact”, analysts at Maybank said in a note. “Seasonally high USD demand around year-end, normalisation of the open-market operation curve, and recent news on U.S.-Indonesia trade negotiation headwinds warrant a more cautious monetary policy response,” Aldian Taloputra, senior economist, Indonesia, at Standard Chartered, wrote. “Despite a likely rate pause, we think Bank Indonesia is still looking for room to cut rates to support growth, especially given the recent Fed rate cut.” Currencies were largely on the back foot against the greenback: Taiwan’s dollar (TWD=TP) , South Korea’s won (KRW=KFTC) , Indonesian rupiah (IDR=) , and the Thai baht (THB=TH) weakened up to 0.5%. Malaysia’s ringgit (MYR=) inched up to its strongest point since early March 2021. Meanwhile, the Bank of Japan is set to raise interest rates on Friday to a three-decade high, signalling it will continue tightening borrowing costs. The move would bring the central bank’s total rate hikes this year to two, despite headwinds from U.S. tariffs and the inauguration of a dovish prime minister. The yen (JPY=) was last trading around 154.78 per U.S. dollar. (USD/) HIGHLIGHTS: Japan’s manufacturing sector contracts at slower pace in December, PMI shows Chile president-elect Kast secured commanding win, but faces challenges ahead Asia stock indexes and currencies at 0400 GMT COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS % DAILY YTD % % Japan (JPY=) +0.23 +1.50 (.N225) -1.2 24.23 China S * India (INR=IN) -0.09 -5.72 (.NSEI) -0.37 9.67 Indones (IDR=) -0.18 -3.59 (.JKSE) -0.28 21.83 ia Malaysi (MYR=) +0.20 +9.46 (.KLSE) 0.07 0.15 a Philipp (PHP=) +0.06 -1.34 (.PSI) 0.52 -6.73 ines S.Korea C * Singapo (SGD=) -0.07 +5.80 (.STI) -0.11 21.02 re Taiwan (TWD=TP) -0.33 +4.12 (.TWII) -1.37 19.32 Thailan (THB=TH) -0.24 +8.80 (.SETI) -0.75 -9.74 d Graphic: World FX rates here Asian stock markets here