July 9, 2020 / 8:09 AM / a month ago

EMERGING MARKETS-Philippines hit by virus spike as China supports Asia stocks

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * China shares close higher for 8th day 
    * Philippine shares hit one-week low 

    July 9 (Reuters) - A record 2,500-plus new coronavirus cases
sent Philippine shares more than 1% lower on Thursday, while
other Asian emerging markets gained strength from an eighth day
of gains for Chinese stocks.
    The rally in Shanghai's main index, which tends to
set the tone for other markets in the region, has been spurred
by the large volumes of extra cash pumped through the financial
system and reflects hopes the world's second-largest economy can
recover quickly this year.
    Those hopes also helped the yuan trade near a
four-month high against the dollar as it fell below the key 7
mark.
    A Reuters poll showed long positions on the yuan climb to a
more than five-month high helped by a deluge of foreign inflows.
 
    Currencies across southeast Asia were also generally higher,
with only South Korea's won flat.
    With a number of countries seeing sharp spikes in COVID-19
cases, the recovery is still in question.
    A fifth of the Philippines' total infections have been
confirmed in the past five days and officials have warned it may
have to tighten its lockdown again.
    Manila shares fell to a one-week low. In line with
the regional move against the U.S. dollar, the Philippine peso
 advanced 0.2%. 
    "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.
    To no immediate effect, state media in China warned of
market risks on Thursday, calling on investors to pursue
rational investments.
    Simmering tensions between the United States and China are
still high on traders' list of concerns as U.S. elections heave
into view and China's introduction of a new national security
law in Hong Kong adds fuel to the fire.
    On China's part, a senior diplomat said the two countries
should release more "positive energy".
    
    HIGHLIGHTS:
    ** The Philippines' top losers were Jollibee Foods Corp
 and SM Prime Holdings Inc 
    ** The Shanghai Composite index rose 1.39% to its
highest close since February 2018
    
 Asia stock indexes and currencies at 0728 GMT
 COUNTRY      FX          FX        FX     INDEX    STOCKS    STOCKS 
              RIC         DAILY %   YTD %           DAILY %   YTD %
 Japan                    +0.01     +1.28           0.40      -4.77
 China                    +0.19     -0.41           1.39      13.13
 India                    +0.03     -4.81           0.74      -11.37
 Indonesia                +0.02     -3.26           -0.02     -19.44
 Malaysia                 +0.14     -4.04           0.26      -0.07
 Philippines              +0.16     +2.49           -1.48     -20.76
 S.Korea                  +0.00     -3.27           0.42      -1.35
 Singapore                -0.01     -3.36           -0.57     -17.64
 Taiwan                   +0.58     +2.28           0.18      1.63
 Thailand                 +0.22     -4.01           -0.03     -13.79
 
 (Reporting by Nikhil Kurian Nainan in Bengaluru; editing by
Patrick Graham and Subhranshu Sahu)
  
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