EMERGING MARKETS – Philippine stocks fall as Fitch’s weaker outlook angers investors

    * Most EM Asia currencies inch higher
    * U.S. inflation figures eyed
    * Indonesia stocks ease after growth forecast cut

    By Shashwat Awasthi
    July 13 (Reuters) - Philippine stocks slipped more than 1%
on Tuesday after credit ratings agency Fitch downgraded its
outlook on the country, stoking fears that other agencies would
also lower their view of the economy which has been battered by
the coronavirus pandemic.
    Fitch on Monday lowered its outlook to 'negative' from
'stable', citing weakening fiscal finances and increased credit
profile risks, though it affirmed Philippines' investment grade
score.
    Equities in Manila gave up all of Monday's gains even
as officials quickly downplayed the revision and insisted the
drag from the pandemic, which led to a record 9.6% economic
contraction in 2020, was transitory.
    "Market reaction was expected as investors now fret possible
action from either Moody's or S&P in the near term," said
Nicholas Mapa, a senior economist at Dutch bank ING.
    Mapa said Philippines' elevated debt-to-GDP and
deficit-to-GDP levels would likely deteriorate in the coming
months and he did not expect a substantial pickup in growth
momentum as the nation grapples with pandemic-led curbs.
    Elsewhere in the region, Indonesia's stocks were
modestly lower, a day after the central bank cut its forecast
for 2021 economic growth and as the largest Southeast Asian
economy saw another record daily rise in COVID-19 cases.

    Moves in other emerging Asian markets were mild as investors
awaited inflation data from the United States later on Tuesday
and Federal Reserve Chair Jerome Powell's testimony this week
for cues on early tapering.
    South Korea's won rose 0.2% and the KOSPI index
 added 0.8% to lead gains in the region, while stocks in
Taiwan and Singapore gained 0.6% each.
    A higher-than-expected core inflation reading from the
United States "may stoke inflation concerns and lead the U.S.
dollar higher, weighing on equity markets," said Margaret Yang,
a strategist at news and research website DailyFX.com.
    
    HIGHLIGHTS:
    ** Singapore's 10-year benchmark yield is up 1.9
basis points at 1.477%.
    ** In the Philippines, top losers are Ayala Land
down 2.6%, Universal Robina Corp down 2.5%, and LT
Group down 2.3%.
    ** Top losers on the Jakarta stock index include Sarana
Meditama Metropolitan down 11.6%, Adi Sarana Armada
 down 7.3%, and Jembo Cable Company down 7%.
    ** Graphic: World FX rates tmsnrt.rs/2RBWI5E
    ** Asian stock markets: tmsnrt.rs/2zpUAr4
        
    
  Asia stock indexes and currencies at                       
                0326 GMT                                  
   COUNTRY      FX RIC      FX     FX     INDEX   STOCKS  STOCKS
                          DAILY   YTD %           DAILY   YTD %
                            %                       %     
    Japan                 -0.03   -6.47            0.78    4.91
    China                 +0.17   +0.98            0.11    2.27
    India                 +0.00   -2.02            0.00   12.24
  Indonesia               +0.00   -3.11           -0.04    1.62
  Malaysia                +0.10   -3.94            0.35   -6.70
 Philippines              +0.08   -4.32           -1.26   -4.38
   S.Korea                +0.24   -5.07            0.70   13.77
  Singapore               +0.16   -2.11            0.76   11.51
   Taiwan                 +0.11   +1.79            0.83   21.93
  Thailand                +0.12   -8.15            1.01    8.02
 
    
 (Reporting by Shashwat Awasthi
editing by Richard Pullin)
  

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