*

MSCI EM Asia touches Feb 2021 high

*

South Korea and Taiwan stocks hit record highs

*

ASEAN equities rise, led by Singapore banks

*

Indonesia stocks surge ahead of expected rate cut

(Updates for afternoon trade)

By Sameer Manekar

Oct 21 (Reuters) -

Emerging Asia equities rose to multi-year highs on Tuesday,

with South Korea and Taiwan shares hitting new peaks as easing

Sino-U.S. trade tensions and AI-driven investment keep the

appetite for risk assets running hot.

The MSCI gauge of emerging market equities

touched its highest level since late February 2021, driven by a

1.3% rally in China's stocks. A gauge tracking ASEAN

equities, dominated by Singapore, jumped 1%.

Investors shrugged off credit worries in U.S. regional banks

and embraced risk assets in developing economies poised to

benefit from an expected Federal Reserve policy easing.

"The 'buy almost everything' trade has been reinvigorated as

concerns about U.S. regional banks, credit, and funding markets

continue to fade into the rear-view mirror," said Chris Weston,

head of research at Pepperstone.

"Trump continues to signal optimism around trade

negotiations with China and markets are reducing expectations of

the 100% additional tariffs on Chinese imports going into effect

on November 1."

South Korea's KOSPI index ended at a record closing

high of 3,823.84 points on rising hopes that the East Asian

country will secure a trade deal with the United States by the

time of the Asia-Pacific Economic Cooperation summit later this

month.

Taiwan's benchmark index closed 0.2% higher at

27,752.41 points. Earlier in the day, it attempted to breach but

stopped a few points short of the 28,000-level.

Singapore's FTSE Straits Times index advanced 1.3%,

marking its strongest single-session gain in nearly three weeks.

Top lenders DBS Group, OCBC, and United

Overseas Bank advanced up to 1%.

Indonesia's stocks jumped 1.6% to a one-week high,

driven by Bank Central Asia, which advanced more than

6% after the country's top lender by market value reported

healthy growth in total loans and profits for the first nine

months of the year.

The rush into equities precedes Bank Indonesia's monetary

policy decision on Wednesday, where the central bank is widely

expected to cut its key interest rate for a fourth consecutive

time, a Reuters poll showed.

Elsewhere in Southeast Asia, shares in Thailand and

Malaysia rose up to 0.5%, while stocks in the

Philippines rose up to 0.2%.

Vietnam's benchmark stock index rebounded a

percentage point after plunging more than 5% on Monday following

a state media report on alleged irregularities in the use of

corporate bond proceeds.

Currencies in the region were largely unchanged, with

Taiwan's dollar edging higher, while Indonesia's rupiah

ticked lower.

Financial markets in India were closed for

a public holiday.

HIGHLIGHTS:

** Yield on Indonesia's 10-year bonds at 5.956%

** Yield Indonesia's 10-year bonds fell below 6% last week

for the first time since Dec 2020

** Thai central bank will work to ensure economic stability,

governor says

** Takaichi elected Japan's premier; Nikkei N225

closes at record high

Asia stock indexes and currencies at 0718 GMT

COUNTRY FX RIC FX DAILY FX YTD INDEX STOCKS STOCKS

% % DAILY YTD %

%

Japan -0.28 +3.98 0.27 23.62

China India - -2.63 - 9.30

Indones -0.12 -3.01 1.44 15.90

ia

Malaysi -0.02 +5.75 0.55 -1.61

a

Philipp -0.06 -0.19 0.16 -6.67

ines

S.Korea Singapo -0.15 +5.38 1.34 15.82

re

Taiwan -0.07 +6.88 0.23 20.48

Thailan -0.26 +5.13 0.38 -7.91

d