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EUROPE MARKET HIGHER AND ASIAN STAY STEADY



Central European stock markets have jumped to multi-year highs this year on hopes of an economic recovery from the COVID-19 pandemic, with Budapest up almost 12% since the start of the year. Budapest's BUX index hit a record peak on Tuesday, propelled by OTP shares, which also touched all-time highs after the bank said it would acquire Slovenia's Nova KBM bank. Prague has gained 14% this year, led by utility CEZ whose hefty dividend plan has attracted investors. CEZ shares hit a fresh six-year high on Thursday. Polish markets were closed for a holiday. Currencies have also been firming this year, with markets seeing interest rate hikes coming in the Czech Republic and Hungary as inflation pressures build amid the recovery. The Hungarian forint was down 0.1% at 346.40 to the euro at 0855 GMT, after hitting a 9-1/2-month high in the previous session. The Czech crown, which hit a 14-month high in May before weakening somewhat, was flat at 25.45 per euro. The Polish zloty and Romania's leu were also little changed. Market focus was on U.S. economic data, which could set the tone for upcoming global central bank meetings.

Investors were long on most Asian market as well as currencies, as vaccination programmes in the region painted an optimistic picture despite a recent spike in infections. Stocks in the Philippines and Malaysia led losses among calm emerging Asian markets on Thursday, while Indian shares hit a record high ahead of a central bank meeting this week. Moves in other regional stock markets were muted while currencies traded flat as investors awaited crucial U.S. economic data due on Friday for any signs of tightening of the Federal Reserve's dovish policy. Prospects of U.S. economic recovery would further stir up talk of the Fed scaling back support measures earlier than expected, and that could unsettle Asia's risk-sensitive markets. As Asian countries reeled under the COVID-19 pandemic and growing inflationary pressures, equities in May clocked their biggest foreign outflows in more than a year. Data showed foreigners sold $12.05 billion worth of equities in South Korea, Taiwan, Philippines, Thailand, Vietnam, Indonesia, and India last month. The Philippine bourse lost as much as 1%, giving up some ground after surging more than 3% in the previous session. The peso was trading largely flat. India's Nifty 50 advanced up to 0.8% to a record high, while the rupee was largely steady. The Reserve Bank of India (RBI) is expected to keep interest rates at record lows and reiterate its commitment on liquidity as elevated inflation prevents the RBI from cutting policy interest rates further, the targeted easing remains their option. However, without any recovery in business confidence it may all be in vain. In Malaysia, which is battling resurgence in COVID-19 cases, shares fell about half a percent as the nation recorded its highest daily death toll since the start of the pandemic. The country's finance minister warned that its 2021 economic growth forecast could be lowered due to the new restrictions imposed to curb the spread of the virus, and analysts say they could weigh on debt instruments. In South Korea, shares ended 0.7% higher, marking their fifth consecutive session of gains, while won closed flat.







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