*
South Korea Q1 GDP grew 0.3% q/q
*
Equities in Seoul retreat 1.8%
*
Indonesia closed for a holiday
By Himanshi Akhand April 25 (Reuters) - Stocks in Seoul led declines in emerging Asian equities on Tuesday after South Korea posted a slim first-quarter economic growth, while currencies in the region remained subdued amid a lack of fresh triggers.
The won weakened for a fourth straight session and shares in Seoul fell 1.8%. South Korea's heavily trade-reliant economy barely averted a recession, and the outlook remained clouded by weak exports due to a cooling global economy. The country's gross domestic product (GDP) in the first quarter expanded by 0.3% over the previous three-month period, compared with an estimate of a median 0.2% rise according to a Reuters poll. "We see growing downside risks for the economy on the back of weak local housing markets and intensifying tensions between the US and China, thus a potential BoK (Bank of Korea) cut is still possible by the end of this year," analysts at ING said in a note.
Among regional equities, stocks in Taiwan and Thailand retreated 1.3% and 0.6%, respectively, while those in Malaysia added 0.2%. Markets in Indonesia were closed for a holiday. Meanwhile, the greenback retreated on Tuesday. News overnight of plunging deposits at First Republic Bank in the U.S. served as a reminder that stability risks have not entirely died down. Markets are currently expecting the U.S. Federal Reserve to raise rates by another 25 basis points at its policy meeting next week.
Investors are also awaiting Bank of Japan's policy meeting this Friday. Governor Kazuo Ueda has stressed the need to keep monetary policy ultra-loose for now, but signalled the chance of raising interest rates if inflation and wage growth overshot expectations. Malaysia's ringgit and Thailand's baht fell 0.1% and 0.2%, respectively, while the Philippine peso edged 0.1% higher.
The Philippines maintained on Monday its economic growth targets over the next five years, citing momentum from increased domestic demand and better labour conditions that would allow its economy to withstand external challenges. Stocks in Singapore fell 0.8% while the Singaporean dollar was flat, a day after the city-state's core inflation rate rose 5% year-on-year in March, slightly lower than the forecast of a 5.1% increase. "We expect the current tightening cycle to have ended and the MAS (Monetary Authority of Singapore) to maintain this pause in the next Oct meeting," analysts at UOB wrote. "It is also too soon to expect monetary policy to reverse part of its restrictive stance given core inflation is still at 5%."
HIGHLIGHTS
** Sources told Reuters that China nudged banks this month
to cut deposit interest rates further, the latest effort to
channel vast savings into spending and more productive
investment
** Thailand's Finance Ministry increased its forecast for
2023 foreign tourist arrivals to 29.5 million this year,
supported by China's reopening
** Malaysian palm oil board sees higher exports to China
this year
Asia stock indexes and currencies
at 0414 GMT
COUNTRY FX RIC FX FX INDE STOCKS STOCKS
DAILY % YTD % X DAILY YTD %
%
Japan -0.09 -2.40 <.N2 0.21 9.81
25>
China <CNY=CFXS -0.20 -0.13 <.SS -0.35 5.66
> EC>
India +0.04 +1.04 <.NS -0.10 -2.09
EI>
Indonesi - +4.89 <.JK - -0.42
a SE>
Malaysia -0.14 -0.92 <.KL 0.11 -4.80
SE>
Philippi +0.14 +0.18 <.PS -0.08 0.41
nes I>
S.Korea <KRW=KFTC -0.10 -5.36 <.KS -1.80 10.81
> 11>
Singapor -0.04 +0.44 <.ST -0.75 1.48
e I>
Taiwan -0.01 +0.19 <.TW -1.35 9.05
II>
Thailand -0.15 +0.57 <.SE -0.58 -7.18
TI>
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Himanshi Akhand in Bengaluru; Editing by
Muralikumar Anantharaman)
