<ul>
<li>Oil spike revives inflation and rate fears</li>
<li>Dollar strengthens as investors seek safety</li>
<li>Korea and Taiwan stocks lead regional losses</li>
<li>Analyst sees sell-off as overdone</li>
</ul>
By Roushni Nair
March 12 (Reuters) - Asian currencies and stocks slipped on Thursday, erasing a two-day rebound, as another surge in oil prices due to escalating Middle East tensions stoked inflation fears and sent investors scrambling back to the safety of the dollar.
MSCI’s emerging market stock index (.MSCIEF) fell as much as 1.6% after a two-session rally, while the EM currency index (.MIEM00000CUS) dropped 0.6%, also reversing a two-day rally. The U.S. dollar index (=USD) rose 0.3%, advancing for a third consecutive session.
Regional currencies weakened against the dollar, led by the Philippine peso (PHP=) , which fell 0.7% to 59.19 per dollar. The Malaysian ringgit (MYR=) slipped 0.4% but remained the region’s best performer so far this year, while the Indonesian rupiah (IDR=) , Thai baht (THB=TH) , Singapore dollar (SGD=) , and South Korean won (KRW=) each lost about 0.2%.
The Indian rupee (INR=IN) slipped towards record lows, though central bank intervention likely helped limit further losses. Oil prices jumped 9% to above $100 a barrel after reports of further attacks on vessels in Gulf waters. (O/R) The move heightened fears that rising energy costs could fuel inflation and keep major central banks cautious on rates, even as the International Energy Agency prepares a record 400 million-barrel reserve release to calm markets.
The immediate concern is when the Strait of Hormuz, critical for 20% of global fuel supply, will be safe for traffic again.
North Asian equities bore the brunt of the selloff, with South Korea’s tech-heavy benchmark (.KS11) falling 1.4% and Taiwan stocks (.TWII) losing more than 1.5%.
Ray Sharma-Ong, deputy global head of multi-asset bespoke solutions at Aberdeen Investments, said markets appear to be pricing in overly severe geopolitical outcomes, triggering a sell-off that looks disconnected from fundamentals, adding that resilient AI-driven demand and limited scope for a prolonged shock could help North Asian equities recover once tensions stabilise.
In Thailand, markets were more resilient. The benchmark stock index (.SETI) was flat after early losses, while Precious Shipping (PSL.BK) rose nearly 3%, even after one of its vessels was attacked in the Strait of Hormuz. Meanwhile, Indonesia’s parliament approved five senior appointments to the financial regulator on Thursday, helping improve sentiment after Jakarta stocks (.JKSE) , which had fallen as much as 0.9%, reversed course to rise 0.5%.
Equities in Singapore (.STI) , Philippines (.PSI) , and Malaysia (.KLSE) lost between 0.2% and 1%, while those in India (.NSEI) and Shanghai (.SSEC) gave up 0.9% and 0.6%, respectively.
HIGHLIGHTS: Korea says policy should be neutral amid Mideast war Samsung Display CEO warnsof cost pressure on oil shock
Asia stock indexes and
currencies at 0438 GMT
<h3>COUNTRY FX RIC FX FX YTD INDEX STOCK STOCK</h3>
<h3>DAILY % % S S YTD</h3>
<h3>DAILY %</h3>
%
Japan (JPY=) -0.10 -1.54 &lt;.N225 -1.54 4.52
*
China 

<h3>XS</h3>
*
*
India 

*
*
Indonesia (IDR=) -0.21 -1.36 &lt;.JKSE 0.54 -14.0
<ul>
<li>8</li>
</ul>
Malaysia (MYR=) -0.38 +3.26 &lt;.KLSE -0.34 1.36
*
Philippines (PHP=) -0.70 -1.36 (.PSI) -0.72 1.01
S.Korea 

<h3>TC</h3>
*
*
Singapore (SGD=) -0.20 +0.73 (.STI) -0.67 3.98
Taiwan 

*
*
Thailand 

*
*

EMVL

EIDO

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iShares Edge MSCI EM Value Factor UCITS ETF

ISHRS MSCI Indonesia

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Dimensional Emerging Markets Value ETF

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EMERGING MARKETS-Asia reverses rally as crude spikes on Gulf attacks, dollar gains