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Philippine peso dips after surprise rate cut

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AI rally lifts emerging Asian stock markets

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Thai equities rise on dovish central bank stance

(Updates for afternoon trade)

By Rishav Chatterjee

Oct 9 (Reuters) - The Philippine peso weakened a shade

while equities slid further after the central bank unexpectedly

cut interest rates on Thursday, though stock markets elsewhere

in emerging Asia rallied on renewed AI-related buying.

The peso slid to 58.165 per dollar while the equity

benchmark gauge, trading largely in the red through the

day, slipped a few additional points after the Bangko Sentral ng

Pilipinas (BSP) delivered a surprise quarter-point rate cut.

This was the fourth consecutive easing by the central bank,

which warned that the Philippine growth outlook had weakened,

though inflation expectations remained well-contained.

"Today's unexpected move comes in the wake of September's

softer-than-expected CPI reading, which seems to have tipped the

balance towards more easing," said Miguel Chanco, chief emerging

Asia economist at Pantheon Macroeconomics.

"Our core view now is that the Board will cut again at the

next meeting, to a terminal level of 4.50%, given its decidedly

more dovish October statement."

Broadly, the MSCI index of emerging Asian equities

, which had slipped more than 1% in the previous

session, rose 0.2%, while the broader MSCI Asia-Pacific ex-Japan

index nudged 0.3% higher.

Overnight, Wall Street hit fresh highs as a renewed AI tech

rally offset concerns about a prolonged U.S. government shutdown

and the lack of major economic data.

Wall Street's strong performance, coupled with renewed

participation from Chinese investors, has provided ample

liquidity for equities, said Capital.com analyst Kyle Rodda.

"I think the AI rally never went away - at best, it took a

breath. The trend remains very strong."

In Taipei, the benchmark climbed as much as 1.5%,

marking its fourth record high in five sessions on the AI surge.

Indonesia and Malaysia rose 0.4% and 0.1%,

respectively, while Singapore's index eased slightly.

Thailand's benchmark jumped 0.9% to its highest

level since February after the Bank of Thailand kept rates on

hold on Wednesday, but signaled potential easing if growth slows

further. The baht fell to its lowest since late August.

"While the Bank of Thailand held rates yesterday, it appears

to be a dovish hold, with the macro picture still looking

benign," said Lloyd Chan, a senior currency analyst with MUFG.

"Further BOT policy easing, along with recent increase in

fiscal support, have likely lent support for Thai equities."

Other currencies in emerging Asia traded in a tight range

against a steady U.S. dollar on Thursday. The Singapore dollar

and its Taiwanese counterpart nudged lower,

while the Indonesian rupiah was flat.

HIGHLIGHTS:

** Thailand to start buying bad household debt this month

** Thailand to support technology investments, finance

minister says

Asia stock indexes

and currencies at

0720 GMT

Japan -0.18 +2.77

1.77 23.59

China India +0.02 -3.57 0.41 6.36

Indonesi +0.03 -2.78 0.39 15.79

a

Malaysia -0.02 +6.00 0.04 -0.86

Philippi -0.43 -0.19 -0.68 -7.22

nes

S.Korea -0.28 +4.64 47.92

--

--

Singapor -0.03 +5.35 -0.34 17.26

e

Taiwan -0.01 +7.34 0.88 18.52

Thailand -0.41 +5.17 0.91 -5.96

(Reporting by Rishav Chatterjee in Bengaluru; Editing by

Mrigank Dhaniwala)