EMERGING MARKETS-Indonesia shares sink on virus mutation fears, surge in cases

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3f2vwbA
    * Jakarta shares hit near two-week low
    * Taiwan dollar tracks best day in more than five months

    By Shashwat Awasthi
    August 31 (Reuters) - Indonesian shares fell more than 1% on Monday, weighed down by a surge
in new COVID-19 cases and the discovery of a more infectious mutation of the coronavirus in the
country as the impact of upbeat Chinese services sector data faded.
    Fears of a further surge in daily infections, already tracking above the past month's daily
average in recent days, put the benchmark index on track for its worst day since August
    South Korean shares also sank more than 1% on a sell-off led by foreign investors worried by
downbeat July factory data and tougher coronavirus-led measures to curb a new burst of
    Taiwan, another export-centric market was also lower and Daishin Securities analyst Lee
Kyoung-min said the July data in South Korea, timed before the resurgence in COVID-19 cases,
raised worries that economic indicators could worsen going forward.
    He said the selling by foreign investors had focussed in the electronics sector.
    Emerging Asian currencies rose early in the session on the back of data showing China's
service sector activity expanded at a much faster pace in August. By the afternoon in Asia most
had retreated, with only Taiwan's dollar and the rupiah booking gains.

    The U.S. Federal Reserve's new strategy favouring higher inflation and growth has weakened
the U.S. dollar since its unveiling last Thursday, despite signs it may push longer-term
Treasury yields - a driver for the currency - higher.
    Speeches by Fed officials including Vice Chairman Richard Clarida this week may shed more
light on the policy and its potential impact on the currency.
    India's rupee, fresh off its best week in two years, gave up 0.3% and stocks
 slid 0.8% ahead of June-quarter gross domestic product data which is likely to show a
record slump.
    Mizuho analysts forecast India's recovery to be stymied by "ongoing pandemic proliferation",
which they said would hinder activity and lead to more fiscal constraints.
    Markets in Malaysia and the Philippines were shut for a holiday.
    ** Singapore's 5-year benchmark yield is down 3.2 basis points at 0.53%
    ** Top gainers on the Thailand's SETI include JCK International up 13.14%,
Apex Development up 12.5% and Luxury Real Estate Investment Fund up ​12%
    ** Top losers on the Jakarta stock index include Pelangi Indah Canindo Tbk
down 6.95%, Toba Bara Sejahtra Tbk down 6.81% and Sunson Textile Manufacturer Tbk
 down 6.79%
   Asia stock indexes and currencies at 0723 GMT                                   
    Japan                     -0.36       +2.73                   1.12          -2.18
    China                     +0.14       +1.58                  -0.24          11.33
    India                     -0.14       -2.87                  -0.60          -4.86
  Indonesia                   +0.48       -4.57                  -1.58          -16.46
   Malaysia                    0.00       -1.78                   0.00          -4.00
 Philippines                   0.00       +4.67                   0.00          -24.71
   S.Korea                    -0.29       -2.64                  -1.17           5.85
  Singapore                   -0.18       -1.16                  -0.02          -21.21
    Taiwan                    +0.64       +2.64                  -1.08           4.95
   Thailand                   +0.06       -3.92                   0.27          -16.01
 (Reporting by Shashwat Awasthi in Bengaluru and Joori Roh in Seoul; Editing by Saumyadeb

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