EMERGING MARKETS-China factory surveys lift stocks, currencies steady

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By Nikhil Nainan

Sept 30 (Reuters)More evidence that China’s economy is rebounding lifted Asia’s emerging stock markets on Wednesday with Malaysia, the Philippines, Singapore and Taiwan all following Shanghai stocks around half a percent higher.

A holiday in South Korea and the start of a week-long break in China on Thursday kept trading subdued, with the action in the U.S. presidential debate late on Tuesday failing to stir much movement from investors globally.

Two surveys showed China’s factory activity, a bellwether for the region, still firmly in growth territory in September.

“The data continues to provide evidence of China’s economic resilience both in the manufacturing and services sector,” Mitul Kotecha, a senior emerging markets strategist at TD Securities, said.

“The strength of the trade components was encouraging, suggesting that exports and imports will continue to improve, which is also positive for the rest of Asia.”

In line with global trends, most stock markets in Asia are slated to post declines in September, with China set to snap three months of gains and Indonesia .JKSE five, after fresh jolts to the global recovery emerged from Europe and investors re-valued companies seen as winners during the pandemic.

The region’s currencies, however, have been supported by the broad weakness of the U.S. dollar.

Taiwan, whose tech-focussed economy has made it a robust performer in the coronavirus crisis, again stood out on Wednesday with its currency TW-=TP gaining 0.7%.

Other currencies were broadly flat as the dollar held steady through the heated debate between Donald Trump and his Democratic rival Joe Biden.

Christopher Wong, a FX strategist at Maybank, said market liquidity in Asia is likely to be thin due to the month-and quarter-end as well as holidays.

He added there was “little incentive to position for event risk,” and markets