EMERGING MARKETS-Stocks skid as U.S.-China trade war keeps investors on edge, currencies firm

By Sameer Manekar

April 11 (Reuters) - Stocks in Asian emerging markets slipped on Friday as investor anxiety over tariff uncertainty and the broader fallout from an escalating U.S.-China trade war prompted a pullback from riskier assets.

But there was relief for regional currencies as the U.S. dollar =USD fell below 100 against a basket of major units for the first time since July 2023.

The Singapore dollar SGD= firmed to its highest level in more than five months, while Malaysia's ringgit MYR= appreciated by 0.7%. The Philippine peso PHP= hit a one-week high, while Indonesia's rupiah IDR= was largely flat.

An MSCI index of emerging market currencies .MIEM00000CUS hit a one-week high.

"A broadly weaker dollar amid a trade slowdown makes the monetary policy picture more clear for EM central banks," said Alex Wolf, head of Asia Investment Strategy at J.P. Morgan Private Bank.

"A weaker USD driven by financial outflows as global investors soured on the U.S. exceptionalism has boosted EM currencies (with a few exceptions), providing central banks more leeway in setting policy."

On Thursday, the Philippine central bank resumed its easing cycle, cutting its key interest rate by a quarter-point to help the economy. Next week, Singapore's central bank is widely expected to reduce the slope of its policy band by at least 50 basis points.

Traders resumed the sell-off in Asian emerging equities a day after a rally prompted by U.S. President Donald Trump's abrupt announcement of a 90-day pause in hefty import tariffs.

But Trump's erratic tariff policies and their potential economic fallout has eroded appetite for risk, with the intensifying trade war with China , Southeast Asia's largest trade partner, keeping traders on edge.

Singapore's benchmark gauge .STI dropped as much as 3%, a day after the index advanced more than 5%. Stocks in Malaysia .KLSE and the Philippines .PSI fell around 2% each, while Indonesian shares .JKSE posted marginal losses.

The MSCI gauge of Asian emerging market equities .MIMS00000PUS edged lower, while the FTSE ASEAN 40 index .FTASEAN40 shed 1%, pulling back from a more than 5% surge in the previous session.

Most gauges were set to end the week deep in the red.

After days of market carnage that scorched everything from the dollar to U.S. Treasuries, usually the global safe-haven, investors were scooping up high-quality assets.

"We are finding best-in-class stocks across sectors and markets that usually trade at a premium, (and are) starting to look attractive relative to their own history," said Rushil Khanna, head of equity investments for Asia at Ostrum, an affiliate of Natixis Investment Managers.

"While defensive, dividend and domestically orientated stocks seem to be a consensus buy, high quality growth stocks are also looking attractive and offer a margin of safety for the patient investor."

HIGHLIGHTS:

Yields on most Southeast Asian 10-year bonds edge higher

China's Xi to visit Southeast Asia as trade conflict with U.S. deepens

Malaysia to await tariffs clarity before revising outlook, c.bank says

*Facing Trump tariffs, Vietnam eyes crackdown on some China trade