EMERGING MARKETS-Rupiah hits fresh low, Asian stocks fall on escalating US-China trade war

By Sameer Manekar

April 9 (Reuters) - Indonesia's rupiah hit a new lifetime low on Wednesday while equities in Asian emerging markets tumbled for a fifth straight session as U.S. "reciprocal" tariffs on dozens of countries, including a massive 104% on Chinese goods, took effect.

An MSCI gauge of Asian emerging market equities .MIMS00000PUS plunged 2.2% to its lowest in a year and fell deeper into oversold territory. Most Southeast Asian equity indexes were also oversold and were creeping towards a bear market.

President Donald Trump's punishing tariffs have rattled global financial markets over the past week, with his latest move to ratchet up levies on Chinese imports deepening the global trade war and intensifying recession concerns.

Many Southeast Asian countries have also been hit with hefty tariffs, and China is the region's biggest trading partner. The new U.S. levies went into effect at 12:01 a.m. Eastern Time (0401 GMT).

"A major trade war between the U.S. and China will not be the best piece of news for markets in the short term," said Vasu Menon, Managing Director, Investment Strategy at OCBC.

Indonesia's rupiah IDR= weakened to 16,965 per U.S. dollar, a new record low, and stalked the 17,000 level despite aggressive intervention from the central bank in both the domestic and offshore markets.

"While Indonesia is less vulnerable to tariffs compared to regional peers, a widening EM (emerging market) risk premium and general risk aversion could continue to pressure rupiah," said Wei-Liang Chang, FX and credit strategist at DBS Bank.

Equities in Jakarta .JKSE rebounded after a sharp 8% loss the previous day but remained 15% in the red for the year.

Indonesian markets have been reeling sharply over the past three weeks due to concerns about fiscal stability and the fallout of U.S. tariffs on local and regional growth, souring investors' views on Southeast Asia's largest economy.

In Singapore, the benchmark index .STI fell for the eighth straight session and has lost 15% from its all-time high less than two weeks ago. The benchmark dropped over 2% on the day to hit a seven-month low.

It dipped into oversold territory this week for the first time since early August last year.

"The prospects of a near-term bounce on the slightest positive headlines cannot be eradicated, especially with technical conditions in deep oversold territory," said Yeap Jun Rong, a market strategist at IG.

Malaysia's stocks .KLSE hit their weakest point in 18 months, while the ringgit MYR= slipped to a two-month low. South Korea's KOSPI .KS11 fell 0.5%, while Taiwan's benchmark index .TWII shed 5% to hit lowest since mid-January last year.

Thai stocks .SETI dipped 1%, while the baht THB=TH was largely flat.

HIGHLIGHTS:

Indonesia's 10-year benchmark yield ID10YT=RR ticks up to 7.173%

Malaysia c.bank says economy diversified but U.S. tariffs will have impact

*U.S. 10-year Treasury yields climb 21 bps to 4.503%

Taiwan rattled by 5.8 magnitude quake, no immediate reports of damage