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EMERGING MARKETS-Asia's emerging FX hit by rising dollar; Indonesia, Philippine stocks fall 1%

    * U.S. 10-year bond yields climb to 1.7630%
    * Malaysian bonds to stay in FTSE Russell bond index
    * China bonds to be included in bond index from this year

    March 30 (Reuters) - Asia's emerging currencies buckled
under a firmer dollar on Tuesday after U.S. bond yields set a
new 14-month high, while stock markets in Indonesia and the
Philippines fell around 1%.
    Benchmark 10-year U.S. Treasuries climbed as
much as 1.7630% in late Asian trade, bolstering the greenback,
which also garnered support from worries of a hedge fund default
that roiled global banking stocks on Monday. 
    "There are still a number of investors who are concerned
about a further spike in UST," Morgan Stanley analysts said in a
note, adding that U.S. economic data surprises could push yields
higher. 
    "Hence, these investors continue to position defensively."
    Stocks in Jakarta led declines in Asia, falling
1.2%. Yields on its benchmark 10-year bonds rose
3.69 basis points to 6.793%, while the rupiah dipped.
    Indonesian bonds are favoured by foreign investors for their
relatively high yields. 
    Meanwhile, the yield on 10-year Malaysian bonds
fell 4.3 basis points to 3.292% - their lowest in more than two
weeks - after FTSE Russell removed the country from its
watchlist and officially retained it in its flagship government
bond index.
    "This is a much welcome relief, and will allow investors to
re-focus on other external drivers," HSBC said.
    However, the ringgit slipped 0.1% and stocks
were down 0.2%.  
    FTSE Russell also confirmed that Chinese sovereign bonds
would be included in its bond index starting this year, setting
the stage for billions in inflows.
    HSBC said that with roughly $2.5 trillion tracking the FTSE
World Government Bond index, some $130 billion in inflows could
be expected, given China's eventual 5.25% weighting. 
    Also on investors radar, U.S. President Joe Biden is
expected to outline how he would pay for a $3 trillion to $4
trillion infrastructure proposal on Wednesday.
    Stocks in India, where markets reopened after a public
holiday on Monday, jumped nearly 2% boosted by banks after a
steel conglomerate completed an insolvency process, allowing
lenders to recover some of their bad loans.
        
    HIGHLIGHTS: 
    ** Malaysia's AirAsia posts record quarterly loss; shares
fall
    ** Philippines raises $500 mln via discount Samurai bond -
IFR
    ** Bank Mayapada Internasional Tbk PT, Pollux Properti
Indonesia Tbk PT and Bank QNB Indonesia Tbk PT
 led losses in Indonesia
  Asia stock indexes and currencies at 0631 GMT
 COUNTRY      FX RIC      FX       FX     INDEX    STOCKS   STOCKS
                          DAILY %  YTD %           DAILY %  YTD %
 Japan                    -0.25    -6.19           0.16     7.25
 China                    +0.02    -0.60           0.37     -0.72
 India                    -0.65    +0.11           1.88     5.71
 Indonesia                -0.07    -2.84           -1.18    1.92
 Malaysia                 -0.10    -2.97           -0.18    -1.16
 Philippines              +0.01    -0.86           -0.94    -8.32
 S.Korea                  -0.17    -4.18           1.12     6.84
 Singapore                +0.02    -1.97           0.72     12.47
 Taiwan                   +0.13    -0.12           0.48     12.37
 Thailand                 -0.19    -4.04           0.56     9.90
      

 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Gerry Doyle and Amy Caren Daniel)
  
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