EMERGING MARKETS-Asia equities slide on US shutdown fears; currencies mixed

(.) * Manila stocks fall for seven straight days * Taiwan shares break three straight days of losses * Bangkok equities fall 0.9% By Rishav Chatterjee Sept 30 (Reuters) – Most emerging equity markets in Asia fell on Tuesday, with stocks in Manila and Bangkok leading the losses, as investors fretted over a potential U.S. government shutdown and its impact on the Federal Reserve's monetary policy trajectory. In FX markets, the MSCI index of emerging market currencies remained flat for the day. The equity benchmark in the Philippines finished down 0.4%, its seventh-straight session in the red, its longest losing streak since mid-December 2024, losing lost more than 5% during this period. The peso was set for a monthly loss of nearly 1.7%. Local sentiment remains subdued amid rising political and corruption concerns, which could slow infrastructure and government spending, while recent storms pose additional risks to economic growth and inflation, said Michael L. Ricafort, chief economist at RCBC. Meanwhile, Thai equities saw another month of foreign outflows worth 200 million baht ($6.19 million), though far below August’s 3.95 billion baht exodus. The benchmark dropped 0.9% on Tuesday. "More broadly, markets are trading range-bound in anticipating of US data and looming shutdown risks," said Christopher Wong, currency strategist at OCBC. Traders may turn to proxy plays such as gold and the Japanese yen if the U.S. shutdown drags on, potentially dampening risk appetite and impacting economic activity, added Wong. The potential U.S. government shutdown has traders concerned that a delay in key jobs data could leave the Federal Reserve flying blind ahead of its October 29 policy meeting. Investors have scaled back bets on rate cuts, especially after Chair Jerome Powell signalled a cautious approach, now pricing in 42 basis points of easing by December and 104 bps by end-2026 — roughly 25 bps lower than mid-September levels. The Indian rupee was flat while the Japanese yen gained 0.4%. Meanwhile, South Korean shares retreated after gaining more than 1% in the previous session. By contrast, China's Shanghai Composite and Malaysian stocks rose 0.5% each. Taipei shares broke a three-day losing streak, lifted by Wall Street's rally as investors piled into tech stocks on optimism over AI and prospects of U.S. rate cuts. Elsewhere, Indonesian stocks declined, with September set to be the weakest month for foreign inflows into Jakarta stocks since 2011, according to LSEG data as of Monday. The Indonesian rupiah and South Korean won fell 0.2% each while the Taiwan dollar gained 0.2%. HIGHLIGHTS: ** Indonesian 10-year benchmark ticks higher to 6.361% ** Typhoon Bualoi death toll rises to 19 in Vietnam Asia stock indexes and currencies at 0709 GMT COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS % DAILY YTD % % Japan +0.36 +6.17 -0.25 14.31 China India -0.03 -3.58 0.14 4.33 Indonesi -0.18 -3.62 -0.55 14.11 a Malaysia -0.02 +6.05 0.40 -1.52 Philippi -0.38 -0.25 -0.74 -8.81 nes S.Korea Singapor -0.04 +5.84 0.57 13.38 e Taiwan +0.21 +7.55 0.94 12.09 Thailand -0.46 +6.06 -0.87 -8.81 (Reporting by Rishav Chatterjee in Bengaluru; Editing by Sherry Jacob-Phillips and Harikrishnan Nair)

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