Asian currencies mixed, stocks subdued as banking crisis lingers

Asian currencies were mixed while equities dived on Monday as simmering concerns over the health of the global financial system soured sentiment, even as a Swiss-backed rescue plan for Credit Suisse materialised over the weekend.

The Indonesian rupiah USDIDR emerged as the top loser, weakening 0.2%, while the Malaysian ringgit USDMYR remained flat and the Philippine peso USDPHP appreciated 0.1%.

Meanwhile, stocks in Singapore STI slumped about 1.2%, hitting their lowest in about a week, while shares in Mumbai NIFTY, Jakarta COMPOSITE and Kuala Lumpur BURSA fell between 0.5% and 1.1%, mirroring U.S. sentiment.

Asian markets are seen as anxious over developments surrounding the global financial system assuming that "we are not out of the woods yet," said Robert Carnell, Regional Head of Research, Asia Pacific at ING.

Similarly, safe haven currencies like the Japanese yen and U.S. dollar gained as investors moved away from riskier assets across emerging Asia.

Regulators globally moved to reassure markets by pledging to enhance liquidity, and Swiss authorities pushed UBS Group AG UBSG on Sunday to buy rival Credit Suisse Group AG (CSGN.S).

Traders have priced in about a 60% chance that the U.S. Federal Reserve will raise interest rates by 25 basis points (bps) at a policy meeting this week before embarking on a steady series of cuts as soon as June.

"Along with a 25 bps hike, I believe the Fed will deliver a sort of fairly sweeping statement along the lines of financial fragility and inflation outlook being future hike determiners. Basically, giving the market a sense we might be at a rate peak but not saying that exactly, but reinforcing that it's getting closer to a peak," Carnell said.

Besides, Indonesia's central bank governor Perry Warjiyo secured a second term after pledging to maintain a "pro-stability" monetary stance until 2024.

Bank Indonesia (BI) would lower its inflation target to 1.5-3.5% in the medium term from 2- 4% now, Warjiyo said.

China kept its benchmark lending rates unchanged for the seventh straight month in March, as expected. The yuan USDCNY shed 0.2%, while stocks in Shanghai 000001 reversed course later in the day to drop about 0.4%.

Additionally, Malaysia's exports in February climbed 9.8% from a year earlier, above expectations, according to government data.

The widening trade surplus in February and the softening of export growth in January-February overall looks relatively mild, Barclays highlighted in a note. The bank continued to expect for a 25 bps hike in July.

HIGHLIGHTS:

** UPDATE 1-China Evergrande to unveil debt restructure details on Wednesday

** Thailand's financial position strong, govt monitoring global banking woes - PM

** Asia policymakers move to calm nerves after Credit Suisse takeover