EMERGING MARKETS-Asian stocks slip on virus case surge; ringgit weakens

Most Asian stock markets pulled back from multi-week highs on Tuesday as rising COVID-19 infections and lockdowns overshadowed strong industrial output data from China, while a drop in crude prices pressured the currency of exporter Malaysia.

Industrial output in China, the region's economic engine, grew in line with expectations and expanded for the eighth-straight month as an economic recovery gathered pace.

Equity indexes in South Korea, Philippines and Thailand however slipped, in line with their broader Asian peers as mounting COVID-19 cases in Japan and South Korea and tighter restrictions in New York and London brought the focus back to the economic impact of the pandemic.

"Equity markets have probably priced in an initial launch of coronavirus vaccine in their eye-watering rally in November.

For now, time might be needed for the vaccines to bring down the daily cases and show effectiveness in containing the pandemic," Margaret Yang, a strategist at DailyFX wrote in a note.

South Korea's KOSPI fell 0.7%, and the won weakened 0.3%, as daily COVID-19 infection rates hovered at record levels, with another 880 new cases reported as of midnight Monday.

The country's prime minister pleaded with residents to abide by social distancing rules to avoid tougher restrictions.

Singapore stocks traded 0.4% lower, but losses were limited by the government's plans to ease restrictions on social distancing and to open a new segregated travel lane for a limited number of travellers from all countries.

Malaysia's ringgit dropped 0.3%, as crude prices dipped due to concerns about fuel demand and a flare-up of tension in the Middle East.

Investors also await a final vote by policymakers on the government's 2021 budget later in the day.

Two opposition sources said veteran leader Anwar Ibrahim, who in September declared he had majority support from lawmakers to form a government, is expected to try to block the budget this time.

The Philippines peso received some support from data showing a 2.9% increase in overseas remittances, a key source of foreign income for the country.

Central bank meetings in Indonesia and the Philippines will be a focus in what is likely to be the last action-packed week of the year for emerging Asian markets.

Analysts at ING expect both the banks to keep rates on hold and adopt a wait-and-see approach for recovery to gain traction after aggressive policy easing this year.

HIGHLIGHTS:

Thailand's 10-year government bond yields are down 4 basis points at 1.22%.

In the Philippines, top index losers are Megaworld Corp down 2.76% at 3.97 pesos; Robinsons Land Corp down 2.75% at 21.25 pesos; JG Summit Holdings Inc down 2.55% at 68.85 pesos.

Top losers on Thailand's SETI include Boutique Newcity PCL down 23.97% at 11.1 baht; MFC-Nichada Thani Property Fund down 10% at 1.35 baht.