EMERGING MARKETS-Stocks rally for third day; Indonesia delivers surprise rate hike
Emerging market stocks rose on Wednesday, extending their recovery for a third day, supported by a more than 2% jump in the Hong Kong, South Korea and Taiwan bourses, while Indonesia's rupiah strengthened after the central bank raised interest rates unexpectedly. The rupiah rose 0.4% against the dollar after Bank Indonesia's surprise 25 bps hike, in efforts to support the currency which has fallen to four-year lows on growing risk aversion and a delay in the expected timing of any U.S. policy easing. "We reckon that today's hike will prove to be a one-and-done, and continue to believe that BI will start a gradual normalisation of policy in Q4, as soon as headline inflation falls below its actual 2.5% target," said Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics.
