BENGALURU (Jan 13): Malaysia led Asia's emerging stock markets higher today as investors bet new Covid-19 curbs may be less severe on the country's economic recovery, while the region's currencies regained their footing as the US dollar nursed losses.

Stocks in Taiwan and Malaysia climbed more than 1%, while gains elsewhere in Asia were more modest and Shanghai's Composite index dipped. China recorded the biggest daily jump in Covid-19 cases in more than five months.

Analysts reckon Malaysia's nationwide state of emergency announced on Tuesday to combat rising Covid-19 cases may improve the implementation of measures, while reducing political risks to a government facing a power struggle.

"We think the impact of the current MCO (movement control order) would be less severe than the initial phase last year given that the containment measures should be less disruptive to companies and households," economists at UOB said.

Stocks in Kuala Lumpur fell as much as 2.6% over the last two sessions, while the ringgit shed around 1% this year to Tuesday.

A pullback in US Treasury yields sapped momentum from the dollar's recent rally, supporting emerging currencies in Asia. Indonesia's rupiah (favoured by foreign investors seeking to tap the country's high-yielding debt) climbed 0.4%.

Investors were betting on large US fiscal stimulus from the incoming Biden administration as well as the quicker roll-out of coronavirus vaccines that could support a return to a level of normality and boost the world's top economy.

Indonesia kick-started its vaccination drive on Wednesday, aiming to inoculate 181.5 million people. Shares in Jakarta climbed as far as 1.1% to their highest since July 2019.

Elsewhere, Singapore shares hovered around 10-month highs, while in Bangkok they touched a near one-year high.

Highlights

• Indonesian three-year benchmark yields are up 8.5 basis points at 5.153%.
• Public Bank Bhd jumped 5.4% in Malaysia, while Sime Darby Bhd and Genting Bhd were up nearly 3%.