Philippine shares slide on surging infections, region edges higher

Philippine shares fell more than 3% on Monday as cases of COVID-19 in the country surged once again, prompting new local restrictions, while other Asian stock markets edged higher on hopes the mammoth US stimulus would help the global economy.

Stocks in Singapore and Malaysia climbed close to half a percent, leading more muted gains in Southeast Asia, as the $1,400 direct payments from the $1.9 trillion US package make their way to households.

Inflation remains a concern, though, and has kept 10-year US Treasuries yields around 13-month highs, sapping appetite for Asia's high-yielding bonds, and the currencies that back them.

The region's emerging currencies on Monday were flat. The South Korea won, however, fell 0.3%.

In the Philippines, a worrying surge in cases has prompted restrictions to be reimposed in parts of the country, including metro Manila. Shares were at their lowest level in more than four months, falling as much as 3.6% - their sharpest drop since August.

"Sentiment is weighed down by the dramatic increase in COVID-19 infections as of late," said Jennifer Lomboy, a Manila-based fixed income fund manager at First Metro Asset.

She added that this "clouds the country's economic recovery."

Vaccine supply has also been limited in the Southeast Asian nation so far with only frontline medical staff and healthcare workers being given shots in an inoculation campaign that started this month.

In China, Shanghai stocks fell 0.6%. They are down around 8% from February highs on concerns that authorities may look to tighten policy to keep things from overheating.

The government set a relatively modest 2021 target of over 6% growth for the world's second largest economy, earlier this month.

Stocks in the trade-reliant economies of South Korea and Taiwan dipped.

The US Federal Reserve's two-day meeting will end on Wednesday, with investors on the lookout for any sign that rising inflation expectations will bring forward policy tightening.

Also meeting this week are the central banks of Indonesia and Taiwan.

Taiwan's central bank governor Yang Chin-long said last week that the United States may label the island a currency manipulator as it has already met Washington's three main criteria for making such a decision.