Equities in emerging Asia were mixed in holiday-thinned trading as investors grappled with a flurry of conflicting headlines around the war in the Middle East that continues to threaten inflation and economic outlooks, reports Reuters.

The MSCI gauge of EM Asia equities edged higher, largely driven by a gain of more than 2 per cent for South Korea’s benchmark KOSPI index.

A global EM currencies gauge was also marginally higher. Indonesia’s rupiah sank to a new all-time low of 17,045 per US dollar as the currency continued to be battered by investor concerns over the country’s fiscal deficit, central bank autonomy and stock market governance.

“I would think that after Trumps weekend rhetoric, markets seem reluctant to price much more than cautious hope until there is something concrete,” said Charu Chanana, chief investment strategist at Saxo in Singapore.

“Investors have seen a lot of headline swings in this conflict and this still looks more like a last-ditch diplomatic effort than a deal. It may cap some of the immediate panic, but it is probably not enough on its own to unwind the broader risk premium.”

Indonesia’s Jakarta Composite Index slipped as much as 1.3pc to its lowest level in three weeks and the Philippine stock market declined 0.9pc.