EMERGING MARKETS-Most Asian FX, stocks gain as China's COVID situation improves

* Asian markets look past China slowdown * Vietnamese dong hits lowest in over a year * Thailand's GDP grows 2.2% in Q1 By Riya Sharma May 17 (Reuters) - Most Asian currencies and stocks were broadly higher on Tuesday, buoyed by optimism over China's improving COVID-19 situation, while a weaker dollar and a fall in U.S. Treasury yields overnight also boosted investor sentiment. Equities in Philippines and Indonesia edged up more than 1% each, while South Korea's won led gains among the Asian currencies. Shares in Thailand climbed 1.6% while the baht was up nearly 0.6%, after Southeast Asia's second-largest economy grew 2.2% in March quarter, beating a forecast of 2.1% rise. Other emerging Asian stock markets were higher too, following an improvement in the fragile global risk appetite as investors looked past China's dismal monthly activity data on Monday, as the world's second-largest economy's coronavirus situation improved. "Given that Chinese economy weakened significantly in April due to COVID-19 lockdowns in some parts... with both industrial production and retail sales coming in weaker than expectation... China has stepped up its policy supports in the past week," OCBC Bank analysts said in a note. In Indonesia, the world's top palm oil exporter, hundreds of smallholder farmers staged a protest in the capital Jakarta and in other parts of the country, demanding that the government end a ban on crude palm oil shipments that has slashed their income. "The ban...it's more negative on the currency just because it reduces export performance... it hurts current account position and that's probably why we're seeing some pressure on the pier as well," said Mitul Kotecha, senior EM strategist with TD Securities. The Indonesian rupiah, which has fallen nearly 1.6% since crude palm oil shipments were halted on April 29, was down 0.2% to hit its lowest since Nov. 2, 2020. The country's trade surplus, however, jumped to its largest ever at $7.56 billion in April, as exports rose to a record high while imports grew slower than expected. In contrast, the dollar slipping from a two-decade high this week and the plunging Chinese yuan founding a ground, as investors trimmed bets on whether U.S. interest rate rises will drive further dollar gains, provided Asian currencies across the board a much needed respite. However, the Vietnamese dong hit its lowest since Jan. 7, 2021. HIGHLIGHTS: ** Indian share markets were up 2.1%, with all eyes on the listing of state-run Life Insurance Corp, the country's biggest IPO, later in the session ** The Indian rupee weakened to touch a record low of 77.73 versus the dollar, with traders watching domestic equities for clues to fund flows ** Top gainers on Thailand's SETI include AQ Estate PCL up 50%, Indara Insurance PCL up 30%, and Castle Peak Holdings PCL up ​23.58% Asia stock indexes and currencies at 0815 GMT COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan -0.23 -11.1 <.N2 0.42 -7.40 1 25> China EC> India -0.20 -4.22 <.NS 1.91 -6.97 EI> Indonesi -0.24 -2.70 <.JK 0.70 0.96 a SE> Malaysia +0.25 -5.04 <.KL 0.55 -0.93 SE> Philippi -0.01 -2.72 <.PS 1.42 -7.41 nes I> S.Korea 11> Singapor +0.41 -2.64 <.ST 0.32 2.49 e I> Taiwan +0.28 -6.87 <.TW 0.98 -11.87 II> Thailand +0.64 -3.33 <.SE 1.65 -2.84 TI> (Reporting by Riya Sharma in Bengaluru; Editing by Rashmi Aich)