EMERGING MARKETS-Asian stocks gain on commodity rally; focus shifts to Powell speech

    * Graphic: World FX rates
    * Graphic: Foreign flows into Asian stocks
    * Thai stock index up 1.7% as energy stocks gain
    * High U.S. Treasury yields keep Asian bond yields elevated
    * Rising fuel prices could hurt consumption in India - BofA

    By Rashmi Ashok
    Feb 23 (Reuters) - Asian equities firmed on Tuesday, as
rising commodity prices fuelled market expectations that global
economic recovery was gathering steam, while bond yields
remained elevated after the recent spike in U.S. Treasury
    The Thai index led gains in the region, trading 1.7%
higher as its heavyweight energy stocks gained on rising crude
    "The dip buyers are out in Asia, with U.S. futures all
tracking higher and Asia-Pacific equities riding the cyclical
upturn commodity wave," said Jeffrey Halley, senior market
analyst at OANDA.
    Focus turns towards U.S. Federal Reserve Chairman Jerome
Powell's Congressional testimony due later in the day, where
comments on higher inflation outlook and rising yields will be
closely watched. 
    "Asia has probably seen the best of the intra-day rally now,
with the risks around the Powell testimony this evening likely
to temper exuberance."
    Longer-dated bond yields in the region remained high, with
yields on Indonesia's 10-year bonds, generally seen
as a favourite in the region, rising as much as 9 basis points
to 6.754 - highest since mid-October.
    Rising U.S. Treasury yields have dented the lustre of Asia's
high-yielding bond markets, while expectations of steeper
borrowing costs and higher inflation also reduce the
attractiveness of emerging economies with less stable currencies
and public finances.
    According to Refinitiv Lipper, emerging market bond funds
faced outflows for the first time in 21 weeks in the week ended
Feb. 17, with outflows of $689 million. 
    Higher bond yields also traditionally draw funds away from
equities by providing more secure long-term returns, and a
switch from high-flying tech stocks in particular has been at
the heart of a recent halt in global stock markets' long rally. 
    Most Asian emerging currencies strengthened as the U.S.
dollar hit a six-week low.
    The Indian rupee strengthened to 72.333 per dollar.
It has risen continuously for the last three months, and is up
nearly 1% so far in February, as India's economic outlook
brightened amid a drop in COVID-19 cases. 
    Analysts in Bank of America Merrill Lynch said in a note
that while high FX reserves would shield the rupee from rising
oil prices, an increase of $10 per barrel could potentially
reduce consumption demand by 0.4% of gross domestic product.
    India imports almost all of its oil. 
    "We continue to expect an oil tax cut to soften retail
prices. A relief is that this can be funded by the Reserve Bank
of India's Open Market Operations as the higher oil import bill
will cut FX intervention," the BofA analysts wrote.
    ** Top gainers on Thailand's SETI include Group
Lease PCL and TWZ Corporation PCL that rose
28.57% and 14.29%, respectively. 
    ** Top gainers on FTSE Bursa Malaysia Kl Index
include Genting Malaysia Bhd up 3.99% and Genting Bhd
 up 3.79%. 
    ** Indian shares on track to snap five straight sessions of
  Asia stock indexes and                              
 currencies at   0704 GMT                        
                     DAILY  YTD %     X   DAILY  S YTD
                         %                    %      %
 China    <CNY=CFX   +0.09  +1.07  <.SS   -0.50   4.35
          S>                       EC>           
 India               +0.22  +1.00  <.NS    0.40   5.38
 Indones             +0.04  -0.46  <.JK    0.01   4.63
 ia                                SE>           
 Malaysi             -0.10  -0.59  <.KL    0.28  -3.22
 a                                 SE>           
 Philipp             -0.06  -1.40  <.PS    0.06  -4.55
 ines                              I>            
 S.Korea  <KRW=KFT   -0.02  -2.20  <.KS   -0.31   6.84
          C>                       11>           
 Singapo             +0.07  +0.04  <.ST    0.69   2.02
 re                                I>            
 Taiwan              +1.60  +2.13  <.TW    0.20  11.61
 Thailan             +0.07  -0.17  <.SE    1.47   3.49
 d                                 TI>           

 (Reporting by Rashmi Ashok in Bengaluru; additional reporting
by Patturaja Murugaboopathy; Editing by Patrick Graham and
Sherry Jacob-Phillips)