Most Asian FX subdued, Indian markets dive on election jitters
MOST Asian currencies drifted in a narrow range on Tuesday, as data from the world's largest economy pointed towards a growth slowdown, while Indian markets tumbled after a sharp rally in the previous session.

Elections in emerging markets across the world have taken centre stage this week, with Mexico's Claudia Sheinbaum becoming the country's first woman president, and the African National Congress suffering its worst election in 30 years in South Africa.

In Mexico, the peso closed at its lowest since last November, while stocks slumped more than 6%, as markets feared that the new government might bring constitutional changes and diminish checks and balances.

Indian stocks, meanwhile, tanked more than 8% in their worst day since March 2020, as vote-counting trends showed Prime Minister Narendra Modi's Bharatiya Janata Party-led alliance falling short of a predicted landslide victory.

Equities in Mumbai had scaled record highs in the previous session after exit polls projected a big win for Modi. The Indian rupee slipped as much as 0.5% to 83.518 per dollar and was poised for its worst day since late July 2023.

The 10-year benchmark bond yield rose 12 basis points to 7.0553% earlier in the day, witnessing its biggest single-day spike in eight months. It was last up 10 bps.

"Elections in South Africa, India, and Mexico have generated sizeable reactions in financial markets," analysts from Capital Economics said.

"Those moves may not last - often the immediate reaction to political events proves overdone - but they highlight the potential for electoral surprises to generate volatility."

Elsewhere in Asia, the Thai baht was among the top gainers with a 0.7% rise, as data showing signs of a softer U.S. economy boosted the possibility of an early Fed rate cut.

Moreover, Thailand's cabinet approved tax measures to boost domestic tourism during the low season.

Markets now await the monthly U.S. payroll figures due on Friday, which could give more clarity on where interest rates are headed.

The Malaysian ringgit rose about 0.2%, while the Philippine peso , the Taiwan dollar and the Indonesian rupiah traded flat.

The Philippine central bank said it was ready to take action when the peso was under stress. The South Korean won reversed gains to trade flat.

The Asian trade bellwether's inflation in May slowed to a 10-month low, which could make the central bank lower its policy in the fourth quarter. Asian shares, however, were mixed, with stocks in Singapore, Taiwan , and Philippines losing between 0.2% and 1.3%.

Among other stock markets, Malaysia and Indonesia rose 0.7% and 1.3%, respectively.

HIGHLIGHTS:

** Indonesia's 10-year benchmark yield falls to 6.872%

** Thailand needs to fix credit access problems, central bank says

** Central banks turn cautious on China's yuan, keen on dollars and gold - Reuters
Forex,Asian,currencies,emerging markets,ringgit
MOST Asian currencies drifted in a narrow range on Tuesday, as data from the world's largest economy pointed towards a growth slowdown, while Indian markets tumbled after a sharp rally in the previous session.