EMERGING MARKETS-Asian stocks, currencies slide as Mideast tensions keep oil prices high

By Shivangi Lahiri

March 23 (Reuters) - Emerging Asia stocks retreated on Monday, led by South Korea and Taiwan, and currencies remained under strain as escalating hostilities in the Middle East and concerns of a prolonged war kept oil prices over $110 per barrel and sapped risk sentiment.

The MSCI's EM Asia index .MIMS00000PUS fell 3% on the day, and has lost more than 11% in March, placing it on track for its worst month since September 2022.

A gauge for global EM currencies .MIEM00000CUS hit a more than three-month low.

The conflict's impact has extended beyond energy into fertilisers, disrupting supplies and raising food inflation risks across the ASEAN-6, with Thailand, Vietnam and the Philippines the most vulnerable if it persists, DBS analysts wrote.

Oil prices stayed above the $110-per-barrel mark hit last week, with investors weighing how U.S. and Iranian threats to target energy facilities stack up against the release of millions of barrels of seaborne Iranian oil to global markets after Washington temporarily removed sanctions. O/R

Risk assets across emerging Asia have come under pressure since the war began in late February, as most economies in the region are net energy importers exposed to supply-chain disruptions and imported inflation.

In East Asia, South Korea's benchmark KOSPI index .KS11 fell as much as 6.4%, with chipmaker Samsung Electronics 005930.KS and peer SK Hynix 000660.KS losing 4.81% and 6.06%, respectively.

The won KRW=KFTC weakened to 1,512.30 a dollar, its weakest since March 2009. .KS

Equities in Taipei .TWII lost as much as 3.2%, with the Taiwan dollar TWD=TP slipping to 32.125 a dollar, its weakest since late April 2025.

Shares in Singapore .STI and the Philippines .PSI also lost between 2% and 3%.

"We have seen foreign investors systematically book profits in South Korea and Taiwan before the start of the conflicts," said Jason Lui, head of APAC and derivative strategy at BNP Paribas.

"It is possible that they may continue to unwind their positions if there could be further escalation in the Middle East conflicts."

Since the start of the Iran conflict, emerging market equities outside China have seen cumulative foreign selling worth $44 billion, led by Taiwan and South Korea, Goldman Sachs analysts wrote.

Global hedge funds last week offloaded emerging Asian equities at the fastest pace since April 2025 as risk aversion intensified, according to a Goldman Sachs client note seen by Reuters.

Among currencies, the Indian rupee INR=IN declined 0.2% to a record low of 93.94 versus the U.S. dollar, while the Philippine peso PHP= stayed just a few pips shy of its all-time low of 60.306. Thailand's baht THB=TH fell to a 10-month low of 33.075 per dollar.

Markets in Malaysia .KLSE, MYR= and Indonesia IDR= .JKSE were closed on account of local holidays.

HIGHLIGHTS:

** Australia, Singapore to step up cooperation to safeguard diesel, LNG trade

** Japan considers cutting inflation-linked bond buybacks as demand rises, sources say

** North Korea's Kim Jong Un reappointed as president of state affairs, KCNA says

** Bank of Korea's newly appointed chief pledges 'balanced' policy

(Reporting by Shivangi Lahiri in Bengaluru; Editing by Janane Venkatraman)

((shivangi.lahiri@thomsonreuters.com))