EMERGING MARKETS-Asian stocks rise on cooling US inflation; trade war woes persist

By Shivangi Lahiri

March 13 (Reuters) - Most emerging Asian equities traded in positive territory on Thursday, following the release of cooler U.S. inflation data for February, although an escalating global trade war continues to loom.

The MSCI's gauge for emerging Asian equities .MIMS00000PUS rose as much as 0.6%, rebounding from a 0.4% drop at close on Wednesday.

Data from the U.S. showed that consumer prices increased less than expected in February, but investors fret that the improvement is likely temporary against the backdrop of aggressive tariffs on imports that are expected to raise the costs of most goods in the months ahead.

However, the upbeat sentiment from cooling U.S. inflation supported a rebound in emerging Asia stocks and currencies, according to Poon Panichpibool, market strategist at Krung Thai Bank.

Stocks in Kuala Lumpur .KLSE rose the most, advancing around 1.5% and snapping a five-session losing streak, while Thai equities .SETI climbed nearly 0.3%.

On the other side, as April approaches, concerns over reciprocal tariffs have surfaced, with U.S. President Donald Trump continuing to impose tariffs on neighbouring countries. This could potentially have a negative impact on assets in emerging Asia, Poon warned.

"Countries such as India, Thailand, Philippines ... collect higher tariffs from the U.S. when we compare to what the U.S. collects from them ... we could definitely face reciprocal tariffs for sure, which could be quite negative for EM Asia," he said.

Stocks in Indonesia .JKSE slipped, falling as much as 0.7% in early trade as a few large banks, including Bank Mandiri (Persero) BMRI.JK and Bank Rakyat Indonesia (Persero) BBRI.JK, pulled the benchmark lower.

A nearly 30% drop in Indonesian government revenues in January, which comes as President Prabowo Subianto implements big spending plans, has raised concerns about fiscal sustainability and a potential jump in borrowing.

Meanwhile, equities in Taiwan .TWII fell the most, dropping around 1.4%, dragged by TSMC 2330.TW.

In currencies, the Indian rupee INR=IN and the Philippine peso PHP= rose about 0.2% each.

On the other hand, the South Korean won KRW=KFTC and the Taiwan dollar TWD=TP slipped around 0.1% each.

A rise in global trade tensions and worries over U.S. recession risks have rattled global markets and sparked huge volatility in the foreign exchange market, as traders see-saw between relief and angst over Trump's whipsawing policy changes.

HIGHLIGHTS:

Thai consumer confidence falls for first time in 5 months as economic uncertainty weighs

Indonesia tax revenues hit by falling commodity prices, official says