(Feb 10): Emerging markets were jittery on Monday on rising global trade tensions, with equities in three export-reliant Southeast Asian countries dropping sharply, while stocks in Singapore hit a record high led by top lender DBS following an upbeat outlook.

Meanwhile, foreign exchange markets mostly struggled for direction. Malaysian ringgit fell as much as 0.7%, with investors assessing top trading partner China's weak economic outlook amid a trade war with the United States.

Trade tensions escalated after US President Donald Trump pledged he would impose tariffs on all imports of aluminium and steel, weighing on commodity-related currencies and Asian equities.

"Despite the current calm, we are wary of trade tensions that could unfold later in the 1H2025 as Trump escalates tariff threats and rhetoric to extract concessions from other countries, likely increasing market volatility and keeping investors cautious," Maybank analysts said in a note.

The Taiwan dollar, Indonesian rupiah and Chinese onshore yuan dropped 0.2%, 0.5% and 0.2%, respectively. The Indian rupee hit a record low, while the Mexican peso was little changed.

Shares in export-focused economies in Southeast Asia, including the Philippines, Malaysia and Indonesia, fell. Stocks in Manila, Kuala Lumpur ad Jakarta shed between 0.1% and 2%.

Indonesia stocks hovered around their lowest level since early June 2023.

"With markets now forced to second-guess President Trump on further trade policy actions, US trade policy uncertainty has reached the highest level in 40 years, except for summer 2019 when the US-China trade war was at its peak," said Peter van der Welle, multi-asset strategist at Robeco.

"We expect market volatility to remain elevated near term in reflection of a significant risk of another high impact trade announcement towards China, Europe, and/or Japan."

Equities in Taiwan dropped as much as 1.3%. Reuters reported that the country's legacy chip industry is contemplating its future as Chinese foundries like Nexchip eat in to the crucial US$56.3 billion (RM251.5 billion) industry.

The Singapore benchmark index however scaled a record high on Monday, boosted by DBS after the bank reported a strong quarterly profit and signalled an improvement in net interest income for 2025 and a dividend capital return plan.

The bank's shares gained up to 4.1% for the day. The Singapore dollar was trading flat.

Market participants will closely look at the Philippines this week amid signs of growing political chaos after Vice-President Sara Duterte signalled she would fight the impeachment case against her.

The peso struggled for direction and was trading more or less unchanged, ahead of the local central bank's monetary policy meeting on February 13.   

Uploaded by Magessan Varatharaja