EMERGING MARKETS-Asian bond yields elevated, equities tick higher ahead of Powell speech

Asian Markets

Rashmi Ashok

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
	    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3f2vwbA
	    * Asian stocks consolidate after rise in U.S. bond yield -
	analyst
	    * Philippines stocks recover from early losses on COVID-19
	curbs
	    * Indian rupee firms, up nearly 1% so far in February
	
	    By Rashmi Ashok
	    Feb 23 (Reuters) - Most Asian equities rose while bond
	yields remained elevated, as investors awaited U.S. Federal
	Reserve Chairman Jerome Powell's Congressional testimony later
	for clues into the central bank's thinking on inflation
	expectations and rising yields.
	    Yields on benchmark 10-year bonds in the region stood at
	multi-month highs as investors recently sold Asian bonds after a
	jump in U.S. Treasury yields.
	    A recent rally in Asian equities has been capped by rising
	bond yields. Higher bond yields are generally seen as a negative
	for equities as they diminish the attraction from stocks'
	dividend payouts, while debt servicing for companies becomes
	more expensive due to higher borrowing costs. 
	    "This explains why equities across the Asia-Pacific have
	entered a consolidative phase in the last couple of days. Stocks
	have rallied a fair bit since March, making them vulnerable to
	rising yields, particularly in the tech sector," said Margaret
	Yang, strategist at DailyFX.
	    "Powell's testimony will be closely eyed to see how tolerant
	the Fed is in view of rising yields, and how they will address a
	strengthening inflation outlook."
	    Most Asian emerging currencies inched higher as the dollar
	hit a six-week low. 
	    The Indian rupee rose to 72.333 per dollar. It has
	risen continuously for the last three months, and is up nearly
	1% so far in February.
	    Analysts at HSBC recently raised their growth forecasts for
	India to 11.2% from 9% for the coming fiscal year, noting that
	the country was experiencing a remarkably strong recovery amid a
	sustained decline in COVID-19 cases.
	    "By some measures, industrial activity is only a few
	percentage points below its pre-pandemic peak. Mobility, too,
	has largely recovered, which should help spur services demand,
	which is still 25% below pre-pandemic level, in the coming
	months."
	    Philippine equities closed flat after falling 1%
	earlier after the government extended coronavirus restrictions
	in the capital Manila late on Monday. 
	    Manila - which accounts for 40% of the Philippines' economic
	output and has been under partial curbs since August - will see
	partial curbs retained until vaccinations start, limiting the
	operating capacity of businesses and public transport.
	
	    "We don't know how long it will take before the vaccine can
	be effectively rolled out and lockdown measures can be lifted.
	Even once the vaccination is kicked off, it will take sometime,
	and the efficacy of the vaccine to the public is unknown," said
	DailyFX's Yang. 
	    The inoculation drive in the Philipines is expected to start
	with 600,000 doses of the Sinovac Biotech vaccines donated by
	China, which is expected to arrive later this month.
	    Stock markets were shut in Japan due to a public holiday.
	    
	    HIGHLIGHTS
	    ** Indonesian 10-year benchmark yields are up 2.4 basis
	points at 6.685%​​ 
	    ** Malaysia's 10-year benchmark yield is up 0.9 basis points
	at 2.984%​​ 
	    ** Top gainers on the Thailand's SETI include Group
	Lease PCL up 26.53% and TRC Construction PCL up
	12.5% 
	 
	  Asia stock indexes and                              
	 currencies at   0522 GMT                        
	 COUNTRY  FX RIC        FX     FX  INDE  STOCKS  STOCK
	                     DAILY  YTD %     X   DAILY  S YTD
	                         %                    %      %
	 China    <CNY=CFX   +0.09  +1.08  <.SS    0.59   5.49
	          S>                       EC>           
	 India               +0.16  +0.94  <.NS    1.13   6.15
	                                   EI>           
	 Indones             +0.07  -0.43  <.JK    0.07   4.70
	 ia                                SE>           
	 Malaysi             +0.00  -0.50  <.KL    0.33  -3.17
	 a                                 SE>           
	 Philipp             +0.04  -1.30  <.PS    0.06  -4.55
	 ines                              I>            
	 S.Korea  <KRW=KFT   +0.05  -2.14  <.KS    0.31   7.51
	          C>                       11>           
	 Singapo             +0.10  +0.07  <.ST    0.71   2.03
	 re                                I>            
	 Taiwan              +1.58  +2.11  <.TW    0.11  11.51
	                                   II>           
	 Thailan             +0.10  -0.13  <.SE    1.44   3.45
	 d                                 TI>           
	 
	
	
	 (Reporting by Rashmi Ashok in Bengaluru)