EMERGING MARKETS-Rupee jumps as central bank steps back, Asian stocks rally

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3f2vwbA
    * S. Korea, Singapore shares up more than 1%
    * Indonesian rupiah hits over two-week high 

    By Shriya Ramakrishnan
    Aug 25 (Reuters) - India's rupee opened around 1% above
levels from a day earlier on Tuesday after traders reported a
halt in a run of central bank interventions aimed at keeping the
currency weak to support its stuttering economy.
    Over recent weeks, banks have spotted interventions by the
Reserve Bank of India to backstop the export sector as the
nation struggles to emerge from the world's third worst
coronavirus outbreak. 
    The rupee, which is about 4% on the year, jumped
from opening levels of close to 75 per dollar to 74.24 rupees in
early trade. 
    "If not for the RBI’s active intervention to absorb the
inflows, INR would have traded much stronger than current
levels," Australian bank ANZ said in a note to clients after the
moves on Monday. 
    "The RBI will likely continue to intervene though
potentially not by as much as before, allowing the currency to
appreciate into year-end."
    Elsewhere in Asia, stock markets were mostly higher as signs
of progress in U.S.-China trade negotiations bolstered risk
appetite, with export-focused markets leading the way after
Washington and Beijing said both sides saw progress in
discussions over their phase 1 trade deal.
    South Korea's KOSPI jumped as much as 1.5% and the
won rose 0.3% against the dollar, with sentiment also
supported by a slowdown in domestic daily COVID-19 infections
from a peak of 397 reported on Sunday.
    Taiwan and Singapore shares gained about 1%
each, while Thai shares were 0.3% firmer. 
    In Indonesia, the rupiah advanced as much as 0.5% to
a more than two-week high ahead of a bond auction later in the
day, where the country's finance ministry aims to raise 20
trillion rupiah ($1.37 billion) to fund its 2020 state budget.
    "We expect demand for Indonesia government bonds to stay
robust," said Duncan Tan, an interest rates strategist at DBS. 
    "The recent plunge in FX-hedging costs also allows foreign
bond investors to cheaply hedge the direct IDR exposure, and
should be helpful to draw back in investors who may be concerned
about IDR underperformance." 
    Indonesian debt has been a favourite with foreign investors
over the years due to their attractive yields, the highest in
Southeast Asia. 
    But investors have preferred to stay at the shorter end of
the curve recently, pushing the spread between five-year
 and ten-year debt to its widest since
    "There is likely some amount of worries of higher inflation
on the back of an expected expansion of Bank Indonesia's balance
sheet," Tan said, adding that more liquidity is also being
directed to shorter-tenor bonds.
    Shares in Jakarta were up about 0.8%.
    Malaysian shares bucked the trend, dragged down by
losses for its medical glove makers as progress on coronavirus
vaccines and treatments dented the appeal of the sector. 
    ** Indonesian 10-year benchmark yields are down
0.7 basis points at 6.729%
    ** Top gainers on the Singapore STI include Singapore
Airlines Ltd up 4.62% at S$3.85, Capitaland Mall Trust
 up 2.66% at S$1.93, Jardine Cycle & Carriage Ltd
 up ​ 2.59% at S$19.4
    ** Top losers on FTSE Bursa Malaysia Kl Index
include Hartalega Holdings Bhd down 5.49% at 16.54
ringgit; Top Glove Corporation Bhd down 5.23% at 26.46
  Asia stock indexes and                                    
 currencies at   0410 GMT                             
                      DAILY  YTD %                 S   YTD %
                          %                    DAILY  
 Japan                +0.00  +2.49              1.85   -1.04
 China     <CNY=CFXS  +0.14  +0.78             -0.19   10.79
 India                 0.00  -3.94              0.41   -5.38
 Indonesi             +0.27  -5.13              0.81  -15.55
 Malaysia             +0.13  -1.88             -0.28   -1.55
 Philippi             -0.02  +4.45             -0.21  -24.11
 S.Korea   <KRW=KFTC  +0.30  -2.45              1.45    7.56
 Singapor             +0.09  -1.79              1.30  -20.21
 Taiwan               +0.53  +2.54              0.88    6.35
 Thailand             +0.03  -4.84              0.32  -16.36

($1 = 14,630.0000 rupiah)

 (Reporting by Shriya Ramakrishnan in Bengaluru
Editing by Shri Navaratnam)

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