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EMERGING MARKETS-Indonesia leads reflation bounce as dollar gains hit currencies

    * Philippine shares hit near 1-year high as growth hopes dominate
    * Indonesia shares touch Sept 2019 high
    * Malaysia stocks fall ahead of COVID-19 curbs announcement

    By Nikhil Nainan
    Jan 11 (Reuters) - Indonesia led gains for a handful of Asian stock markets
on Monday, buoyed by hopes of a reflationary lift for economies across the
region in the months ahead, while Malaysian shares sank ahead of the
announcement of fresh coronavirus curbs.
    Climbing as much as 1.8%, shares in Jakarta hit their highest since
September 2019 as the prospect of further U.S. fiscal stimulus added to hopes
for a region which has so far ridden out a year of crisis better than many
western peers.
    Democrats victory in Senate elections last week have flipped investors
globally back towards trades that bet on a bounce in prices and growth this
year, traditionally plays that will benefit faster-growing and riskier emerging
markets.
    "The global reflation theme should be dominant in the first quarter, and in
several aspects, Asia macro is entering 2021 from a position of strength," said
Duncan Tan, an interest rate and FX strategist at DBS. 
    The promise of "trillions" in extra spending, however, has also sent U.S.
Treasury yields to 10-month highs, lifting the dollar and pressuring
many emerging currencies. 
    Tan argued the dollar strength was more likely to be only a short-term
bounce.
    Indonesia's rupiah - a favourite among foreign investors looking to
the country's high-yielding bonds - fell 0.7% along with South Korea's won
 as the dollar's bounce weighed.  
    Stocks in Kuala Lumpur fell sharply as traders braced for a new
round measures to curb the spread in COVID-19 cases that are expected to be more
targeted.
    Industrial production in Malaysia also contracted unexpectedly in November,
data showed, denting sentiment. Citigroup said the latest wave of infections
posed the largest near-term risk and predicted the country's economy would
remain soft in the first months of this year. 
    Singapore shares also dipped 0.2% as investors booked profits after
the index crossed the 3,000-point level on Friday.

    HIGHLIGHTS:
    ** Indonesian 10-year benchmark yields are up 11 basis points at 6.238%
    ** Top losers in Malaysia include Hartalega Holdings Bhd, PETRONAS
Chemicals Group Bhd and Malayan Banking Bhd 
    ** Fitch affirms Philippines, expects economic activity to continue to
recover 
    ** China's factory prices fall at slowest pace in 10 months in December
      
         Asia stock indexes and currencies at 0632 GMT      
 COUNTRY      FX          FX       FX      INDEX     STOCKS   STOCKS
              RIC         DAILY %  YTD %             DAILY %  YTD %
 Japan                    -0.17    -0.84             -        2.53
 China                    -0.05    +0.76             -1.49    1.26
 India                    -0.26    -0.50             0.50     3.12
 Indonesia                -0.71    -0.28             1.32     6.05
 Malaysia                 -0.32    -0.57             -1.23    -0.86
 Philippines              +0.00    -0.12             0.20     2.31
 S.Korea                  -0.68    -1.01             -0.12    9.57
 Singapore                -0.37    -0.67             -0.20    5.05
 Taiwan                   +1.70    +1.79             0.60     5.60
 Thailand                 -0.30    -0.56             0.71     6.76
 
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Patrick Graham)
  
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