Most Southeast Asian stock markets rose on Wednesday, with Thailand leading the pack, after the Bank of Thailand cut its benchmark interest rate to a record low to cushion the economy from the coronavirus impact.
Other markets in the region also clocked gains on locally driven news, even as broader Asian stocks and currencies lacked direction after scepticism over Moderna Inc's Covid-19 trial vaccine dented hopes of a quicker rebound from the crisis.
The Thai benchmark rose 0.9% to its highest closing level since March 6, as the central bank cut its benchmark interest rate for the third time this year to help the region's second-largest economy, which slipped into a recession in the first quarter. Thailand's sixth-largest lender, TMB Bank jumped 7.2%, while financial services company Srisawad Corporation added 5.1%.
Meanwhile, Malaysian equities extended gains into a sixth straight session amid rising expectations of an impending rate cut, as negative inflation coupled with signals from its central bank of ample headroom to ease rates to raise expectations. The country's consumer price index for April posted a steeper-than-expected fall as the economy remained in deflation in April for the second month in a row.
"The economy, staring at a deep downturn ahead, is demanding more policy accommodation. Cutting interest rates remains an important option at the central bank's disposal, while there is space to do so," said Prakash Sakpal, Asia economist at ING. Singapore equities, however, fell 0.8% and snapped a three-session rally, as the city-state looks to restart its economy with a phased easing of restrictions. "The market is cautious on the consequences from the opening up of the economy," said Paul Chew, head of research at Singapore brokerage Phillip Securities. But the restarting of the economy in Singapore does imply that the market and economy has likely bottomed and a gradual improvement in the equity market can be expected, he added.