MOST emerging Asian stock markets tumbled on Friday, with South Korea and Taiwan leading the decline, as U.S. slowdown fears soured risk appetite globally.

Investor sentiment was spooked following a weak U.S. manufacturing report, even as the Federal Reserve signalled this week a potential end to its restrictive policy at its September meeting.

The MSCI International All Asia Pacific Index, including Japan, slumped more than 3.5%, its worst day in more than three years.

The tech-heavy bourses in Taipei and Seoul were among the worst hit with a slump of 4.4% and 3.7%, and also marked their third and fourth weekly losses, respectively.

"Sentiment has been worsening despite the Fed's looming rate cut. Investors were more sensitive to the recession risk and started to take profit from the U.S. rally," said Ken Cheung Kin Tai, chief Asian FX strategist, Mizuho Bank.

Tokyo's Nikkei took a significant beating, ending nearly 6% lower amid a stronger yen, while shares in Bangkok, Singapore, Manila and Kuala Lumpur slumped in a range of 0.8% to 2%.

The Malaysian ringgit was one of the outliers. The ringgit advanced 1.5% to a one-year high and traded at 4.500 per dollar, while the Thai baht edged 0.5% higher. The ringgit is the only positively performing emerging Asian currency with a 1.8% gain on a year-to-date basis.

"We do sense there is more positive idiosyncratic optimism towards the ringgit amid the government reforms, better-than-expected growth and more foreign investor interest," analysts from Maybank wrote in a client note.

Among other Asian currencies, the Taiwanese dollar slipped 0.3%, while the Indian rupee, Indonesian rupiah and the Singapore dollar traded between flat and 0.2% higher.

South Korea's won recouped most of early losses to close marginally lower. The country's inflation ticked higher for July, slightly beyond market expectations due to supply-side pressure, casting doubt on whether the central bank will be in a position to cut interest rates in the near term.

"This (rise in inflation) may add more uncertainties over the Bank of Korea's rate cut timing but should not change the easing direction," Mizuho Bank's Kin Tai said.

HIGHLIGHTS:

** Indonesian benchmark 10-year bond yield steady at 6.835%

** China central bank adviser calls for greater stimulus, inflation goal

** Indonesian financial regulators assess geopolitical risk, impact to economy

 - Reuters