EMERGING MARKETS-South Korea leads muted Asian stocks higher ahead of Fed meeting
March 16 (Reuters) - South Korea, China and India led Asia's emerging stock markets higher on Tuesday following a rally in Wall Street, although gains were capped ahead of the two-day U.S. Federal Reserve policy meeting.
Stock market gains were largely subdued at below half a percent, with only South Korea .KS11 adding more.
Currencies in the region were flat to slightly higher as the dollar stood firm despite a small pullback in the U.S. benchmark 10-year Treasury yield.
While the yields US10YT=RR were at 1.59%, off 13-month highs of 1.64% hit on Friday, another spike could sap appetite for Asia's higher-yielding currencies and bonds.
Investors are keeping an eye out on any commentary from U.S. monetary policymakers on the recent run-up in yields, which have risen on bets of faster growth and inflation.
OCBC analysts said gains in Asia may be limited ahead of the Federal Open Market Committee's meeting later in the day. They said yield on the benchmark U.S. Treasury note could test 1.7% "should Powell fail to push back on the increases in yields."
By late afternoon, Philippine shares .PSI gave up most of their earlier gains and were last up 0.1%. It follows a sharp fall on Monday when a surge in COVID-19 cases prompted new curbs and renewed worries that the economic recovery would be hit.
China .SSEC and India .NSEI, both recovering from falls on Monday, rose 0.4% each.
The central banks of Indonesia and Taiwan will hold their policy meetings after the Fed statement, which is expected on Thursday morning during Asia hours. Both are expected to keep their key rates unchanged. nL4N2K318O nL4N2LD2I8
The rupiah IDR=, flat on Tuesday, has lost more than 3% since Feb. 16, while the benchmark 10-year government bond yield ID10YT=RR has fallen close to 50 basis points to 6.762%.
Singapore shares .STI edged higher on Tuesday.
Total employment in the city-state shrank the most in more than two decades in 2020, data showed, with foreigners' jobs accounting for most of the decline. nB8N2DT01L
** Indonesian 10-year benchmark yields up 0.4 basis points to 6.762%
** Aboitiz Equity Ventures, Bank of the Philippine Islands BPI.PS and Ayala Corp AC.PS led the early gains
** Malaysian palm oil producer FGV jumps nearly 29% after surviving Felda's bid nL1N2LE063
Asia stock indexes and currencies at 0639 GMT
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(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Richard Pullin and Arun Koyyur)
((NikhilKurian.Nainan@thomsonreuters.com; Twitter: @NikhilKurianN))