EMERGING MARKETS-Asian stocks down as fresh tariff threats dent risk appetite

By Shivangi Lahiri

March 14 (Reuters) - Most emerging Asian stock markets rebounded on Friday but were still set for weekly losses, as relentless tariff threats from U.S. President Donald Trump intensified global trade tensions and roiled investors.

Taiwan stocks .TWII tacked on 0.2% though they were poised for their third straight week of losses, a run last seen in July 2024.

It was a similar case for stocks in Thailand .SETI and Malaysia .KLSE, which were up 0.9% and 0.2%, respectively, but headed for declines of 2.6% and 2.5% for the week - with the Malaysian market staring at its worst weekly performance since September 2022.

Rising global trade tensions have stirred volatility in global markets and sapped risk appetite, driving investors towards safe haven assets like U.S. treasuries and gold, with the yellow metal reaching a record high. US/ GOL/

Trump threatened on Wednesday to escalate a global trade war with further tariffs, as major U.S. trading partners said they would retaliate in tit-for-tat measures that have frayed investor nerves.

"Reciprocal tariffs in particular are going to be quite hurtful," said Illiana Jain, an economist at Westpac.

"When you add reciprocal tariffs or try and pressure a lot of these Asian economies to drop tariffs that are there to protect domestic industries, we might see prices start to increase for some of the critical goods, and that's going to hamper growth as well as general sentiment within Asia."

Indonesia stocks .JKSE fell as much as 1.6% on Friday and were on track for a 1.4% weekly drop.

Indonesia's government maintained its budget deficit forecast at 2.53% of GDP this year despite a 30% plunge in tax revenues in the first two months of 2025, the finance minister said on Thursday.

DBS analysts said the 2025 fiscal deficit target "might need to be revised higher by 30-40bps if weak revenue trends persist."

Equities in the Philippines .PSI rose as much as 0.9% on the day.

Regional currencies inched higher as the greenback held steady on Friday. The Philippine peso PHP= added 0.3%, while the Malaysian ringgit MYR= edged 0.2% lower.

The Indonesian rupiah IDR= also added 0.1% to 16,400 against the dollar, but still lingered around the five-year low it slipped to last month and remained the worst regional performer in emerging Asia.

"In light of our expectations of a re-firming in the dollar bias this month and next quarter, rupiah is likely to stay offered," DBS analysts added.

Investors now wait for Bank Indonesia's (BI) rate decision next week.

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