Taiwan’s Taiex rises 2%, RBI rate decision ahead

SINGAPORE – Taiwan stocks led gains in Asia-Pacific markets as investors brushed off China’s military drills following a visit by US House Speaker Nancy Pelosi.

Taiwan’s Taiex rose 2.03%, with chipmaker TSMC rising 3%. The index traded lower this week as tensions between the United States and China increased over Pelosi’s trip.

Markets appear unfazed by China’s exercises in Taiwan, although Japan’s Defense Minister Nobuo Kishi said Chinese missiles landed in Japan’s exclusive economic zone and called the military exercises a “serious problem”, according to an NBC News report.

Japan’s Nikkei 225 rose 0.78% and the Topix index gained 0.75%.

MSCI’s broader index of Asia-Pacific shares outside of Japan added 0.76%.

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The Reserve Bank of India announced that it would raise rates by 50 basis points to 5.4%.

Of 63 respondents to a Reuters poll, 26 expected such an outcome, while 20 predicted a 35 basis point rise.

“We believe the optimal anchoring of policy will require at least another 50bp hike,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a Friday note ahead of the decision. He pointed to underlying inflation risks and a hawkish Fed.

“All said, it is in the … RBI’s interest to advance 50 bps instead of saving 15-25 bps, but wasting the macro-stability stemming from the May/June hikes,” he said.

After the announcement, the Nifty 50 was up 0.28% and BSE Sensex in India was up 0.34%.

The Indian rupee strengthened slightly to trade at 79.03 per dollar.

Overnight in the US, the Dow Jones Industrial Average lost 85.68 points, or 0.26%, to 32,726.82. The S&P 500 was virtually flat at 4,151.94 at the close. The Nasdaq Composite gained 0.41% to 12,720.58.

Friday’s jobs report is expected to show that 258,000 jobs were created in the US last month, according to estimates from Dow Jones economists. That’s down from the 372,000 added in June.

foreign exchange and oil

The US dollar index, which tracks the greenback against a basket of its peers, was last at 105.854 after a recent drop from around 106.5.

The Japanese yen changed hands at 133.22 per dollar. The Australian dollar was at $0.6963, after falling sharply from over $0.7 on Tuesday.

US West Texas Intermediate crude rose 0.4% to $88.89 a barrel, after losing 2.3% in the previous session.

Brent crude futures gained 0.27% to $94.37 a barrel after closing Thursday’s session down 2.75% at $94.12 a barrel. Both benchmarks hit their lowest levels in months.

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