July 9, 2020 / 5:08 AM / a month ago

EMERGING MARKETS-New infection spike hits Philippine shares as Asia tracks China

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * China shares set for 8th day of gains
    * Philippine shares at one-week low as infections spike

    By Nikhil Nainan
    July 9 (Reuters) - Philippine shares fell more than 1% on
Thursday after the nation reported a new daily peak of
coronavirus infections, while other Asian emerging markets
tiptoed higher as an eighth day of gains for China kept the mood
among investors broadly positive.
    The rally in Shanghai's main index, which tends to
set the tone for a number of other markets in the region, has
been spurred by the large volumes of extra cash being pumped
through the financial system and reflects hopes the global
economy can recover quickly later this year.
    But virus flare-ups in a number of countries continue to
sour that picture, with the Philippines one nation where the
government has warned it may tighten its lockdown. 
    "We have two competing narratives, where the reopening
optimism suggests buy but the fear of second-wave spreaders
suggests tempering one's enthusiasm," Stephen Innes, the chief
global market strategist of AxiTrader said. 
    With another 2,500-plus infections announced late on
Wednesday, a fifth of the Philippines' total infections have
been confirmed in the past five days.
    Shares are at their lowest in a week.
    With the U.S. dollar nursing losses, most currencies in the
region were flat to slightly higher. China's yuan
climbed to its strongest level since mid-March.
    Fiscal stimulus, heavy government borrowing driving up bond
yields and a state-media editorial talking up China's strong
fundamentals have supported the recent rise.
    Tensions between the United States and China are still high
on traders' list of concerns as elections near and following
China's introduction of a new national security law in Hong
Kong.
    The market showed little or no reaction on Wednesday to a
Bloomberg report that advisors to U.S. President Donald Trump
had weighed proposals to undermine the Hong Kong dollar's peg to
the greenback. 
    On China's part, a senior diplomat said the two countries
should release more "positive energy".
    
    HIGHLIGHTS:
    ** Top losers in the Philippines were Aboitiz Power Corp
, Jollibee Foods Corp and SM Prime Holdings Inc
 
    ** Indonesian 10-year benchmark yields are up 2.1 basis
points at 7.15%
    
              Asia stock indexes and currencies at 0406 GMT
 COUNTRY      FX          FX        FX      INDEX    STOCKS    STOCKS
              RIC         DAILY %   YTD %            DAILY %   YTD %
 Japan                    -0.01     +1.26            0.67      -4.51
 China                    +0.27     -0.33            1.03      12.74
 India                    +0.00     -4.85            0.45      -11.64
 Indonesia                -0.17     -3.44            0.33      -19.14
 Malaysia                 +0.12     -4.06            0.26      -0.08
 Philippines              +0.19     +2.52            -1.15     -20.48
 S.Korea                  +0.06     -3.21            0.75      -1.03
 Singapore                +0.10     -3.25            -0.24     -17.32
 Taiwan                   +0.56     +2.26            0.40      1.85
 Thailand                 +0.22     -4.01            0.22      -13.61
 
 (Reporting by Nikhil Kurian Nainan in Bengaluru; editing by
Patrick Graham and Richard Pullin)
  
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