BANGKOK Sept 6 (Reuters): Thailand’s baht strengthened against a weaker dollar on Monday after the country’s prime minister survived a confidence vote in parliament, while a jump in Reliance Industries Ltd vaulted Indian shares to a record high.
The baht, up as much as 0.9%, has weakened more than 8% this year and is among the worst performing currencies in South-East Asia.
Prime Minister Prayut Chan-O-Cha and five cabinet ministers comfortably survived a vote of no confidence in parliament on Saturday, although activists planned more protests against the government.
“The market might think that since PM Prayut could maintain his power, there will be less discontinuity in policies. Hence, the market views this as positive news and that’s why THB is sort of rallying,” said Poon Panichpibool, markets strategist at Krung Thai Bank.
However, he said the victory “should be viewed as negative to the long-term view of the Thai economy since the government did fail to cope with the (Covid-19) outbreak effectively.”
Meanwhile, Thailand’s commerce ministry said headline inflation unexpectedly dropped for the first time in five months in August from a year earlier, mainly due to government subsidies.
The greenback hovered near a one-month low after a weaker-than-expected U.S payrolls report on Friday raised hopes that the central bank would retain its accommodative monetary policy for longer.
That boosted Indian shares to a record high, with energy and media stocks among the top gainers. Oil-to-telecoms conglomerate Reliance added as much as 3.8% to hit an all-time high.
The company said on Friday its unit invested 3.93 billion rupees in Strand Life Sciences Pvt Ltd. Most equities across the region traded relatively subdued as U.S. markets were shut for Labour Day.
Shares in Singapore gained, while those in Malaysia and the Philippines eased. Chinese equities rose over 1% after the country’s Vice Premier vowed to support the private economy, and healthcare and consumer staples stocks rebounded from huge sell-offs. – Reuters
Read More: Emerging markets – Thai baht leads Asia forex gains as PM Prayut