June 17, 2020 / 10:30 AM / 16 days ago

EMERGING MARKETS-Recovery hopes support Asian shares amid geopolitical tensions

    * S.Korean shares end higher 
    * U.S. retail sales data fuels recovery hopes 
    * Rupiah little changed ahead of c.bank meeting on Thursday
    * Indian shares down after troops die in border clash with
China

    By Nikhil Nainan
    June 17 (Reuters) - South Korean shares reversed earlier
losses on Wednesday as hopes of a quick economic recovery lifted
sentiment across emerging markets, though Indian stocks remained
weak after a border clash with China.
    Gains in the region were largely kept in check by Beijing
reinstating strict measures to control fresh outbreaks of the
coronavirus and as six U.S. states reported a record number of
new cases.
    Optimism over a recovery, amid geopolitical flare-ups in
parts of Asia, was fuelled by data that showed U.S. retail sales
bounced back sharply in May and as the U.S. Federal Reserve
started its corporate bond buying programme.
    Thai and Malaysian shares were the best
performers in the region, gaining 0.7% and 0.6%, respectively.
    South Korean shares ended marginally higher,
recovering from a 1.5% drop earlier following fresh tensions
with North Korea.
    Pyongyang rejected a South Korean offer to send special
envoys and said it would redeploy troops at the border, a day
after it blew up a joint liaison office set up in a border town.

    The won remained under pressure, down 0.6%
against the dollar. 
    Indian shares reversed course late in the session,
dropping 0.2%, amid heightened tensions with China after a
deadly border clash.
    India said 20 of its soldiers had been killed in the clash.
    "By the looks of things it seems as though both sides are
trying to de-escalate the situation, but this is nevertheless a
very unwelcome development in an environment not short of
possible risks," Deutsche analysts said in a note.
    However, the rupee gained 0.1%.
    Abhishek Goenka, the head of Indian forex advisory services
firm IFA Global, said he expected state-run firms would supply
dollars to ease the strain on the rupee.
    The Indonesian rupiah was little changed ahead of a
central bank meeting on Thursday, when rates are expected to be
cut. Southeast Asia's largest economy is facing its first
contraction since 1999 in the second quarter due to curbs to
control the spread of the coronavirus.
    
           Asia stock indexes and currencies at 0947 GMT
 COUNTRY      FX          FX       FX     INDEX    STOCKS   STOCKS
              RIC         DAILY %  YTD %           DAILY %  YTD %
 Japan                    -0.06    +1.15           -0.56    -5.08
 China                    -0.07    -1.80           0.14     -3.75
 India                    +0.08    -6.26           -0.21    -18.57
 Indonesia                -0.04    -1.03           0.03     -20.82
 Malaysia                 -0.07    -4.42           0.57     -3.93
 Philippines              +0.05    +1.09           0.00     -19.62
 S.Korea                  -0.55    -4.74           0.14     -2.58
 Singapore                +0.01    -3.59           0.10     -17.17
 Taiwan                   +0.07    +1.43           0.20     -3.86
 Thailand                 -0.42    -4.17           0.66     -12.89
 
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Sriraj Kalluvila)
  
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