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EMERGING MARKETS-China stocks up after Lunar New Year break; Indonesia, S.Korea rates in focus

China stocks jumped on Monday on the back of Lunar New Year travel spending data as trade resumed after the holiday, while regional currencies held largely steady with a focus on policy rate decisions in Indonesia and South Korea this week.

EMERGING MARKETS-China stocks up after Lunar New Year break; Indonesia, S.Korea rates in focus

Stocks in Shanghai .SSECrose 1.6%, cutting year-to-date losses down to about 2.2%, but China remains the worst performer among Asian equities.

The blue-chip CSI 300 Index. CSI300 rose 1.2%, while the yuan CNY=CFXS was largely steady at 7.198 per U.S. dollar.

Data showed that tourism revenues in China during the Lunar New Year holiday rose 47% year-on-year and surpassed 2019 levels, although revenues per trip were below pre-pandemic levels. China's central bank left a key policy rate unchanged as expected.

"Given reports that parts of China's demand were strong during the Lunar New Year holidays, namely tourism and spending... the question is whether sentiment is set to shift onto a better footing," HSBC analysts wrote in a research note.

"China's near-term growth and sentiment outlook will be very important for the FX market in the coming weeks," they said.

Investors are waiting to see if China's government rolls out new stimulus measures to try to sustain the rebound in the country's stock market.

Shares in South Korea. KS11 rose as much as 1.3% to their highest in 20 months. Equities in Singapore. STI rose 0.3% to a seven-week high, while those in the Philippines. PSI retreated 1.1%.

Equities in Bangkok. SETI rose 0.2% after data showed Thailand's economy unexpectedly contracted in the fourth quarter of 2023 from the third, adding to pressure on the central bank to give in to the prime minister's demands for a rate cut.

Regional currencies were subdued as the dollar held steady after U.S. inflation data last week cast doubts on how quickly the Federal Reserve would cut rates, with traders now betting on June. FRX/

Investor focus is also on the Bank Indonesia (BI) and Bank of Korea's rate decisions, due on

Wednesday and Thursday, respectively.

Economists in a Reuters poll expect BI to keep its key policy rate unchanged on the back of subdued inflation and an improving currency outlook.

They also predicted the first rate cut would come in the next quarter, and saw a limited impact from the country's presidential election last week. Unofficial vote counts show Defence Minister Prabowo Subianto probably won outright.

"Currency and bond market stability will be the main considerations in the coming months... Armed with political stability, the central bank is likely to be focused on global developments," DBS analysts wrote in a client note.

DBS also expects policymakers to be wary of a prematurely dovish turn, as markets continue to reassess their Fed rate-cut bets.

The rupiah IDR= was a shade lower at 15,633 per dollar, while stocks. JKSE fell 0.3%.

Inflation data from Malaysia and Singapore also remain on investors' radar this week.

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