Southeast Asia Stocks - Hit by rising U.S. bond yields

(Reuters) - Southeast Asian stock markets fell on Friday on worries of foreign fund outflows after benchmark U.S. Treasury yields surged to seven-year highs and strong economic data stoked concerns about inflation and a more vigorous rate hike cycle by the Federal Reserve.

On Thursday, 10-year U.S. Treasury yields rose to a fresh seven-year high, on anticipation that Friday's monthly payrolls report would be stronger than expected, with investors looking closely at the data for signs of wage growth. [MKTS/GLOB]

A survey of the U.S. services sector showed on Wednesday activity raced to a 21-year high in September, sparking speculation the payrolls report could also surprise.

A Reuters poll showed non-farm payrolls to increase 185,000 in September, lower than the previous month's 201,000 rise.

Meanwhile, earlier this week, Fed Chairman Jerome Powell emphasized that the outlook for the U.S. economy is "remarkably positive" and that the central bank many raise the interest rates above the estimated "neutral" setting.

Indonesian shares <.JKSE> fell for a fifth straight session, declining as much as 0.9 percent to a one-month low.

Bank Central Asia Tbk and Unilever Indonesia Tbk declined 0.7 percent and 1.1 percent, respectively.

An index of the country's 45 most liquid stocks <.JKLQ45> dropped 0.4 percent.

Singapore shares <.STI> declined 1 percent to a two-week low. Jardine Matheson Holdings fell 1.6 percent and Oversea-Chinese Bank shed 1.2 percent.

Philippine shares <.PSI> slipped 0.2 percent to a more than three-month low, weighed down by industrials and financials.

Data released earlier in the day showed Philippine inflation accelerated for a ninth straight month in September, hitting the highest in nearly a decade at 6.7 percent, although coming in slightly slower than the 6.8 percent forecast in a Reuters poll.

Conglomerate JG Summit Holdings slid 2.1 percent, while BDO Unibank fell 1.7 percent.

Malaysian shares <.KLSE> declined 0.5 percent with IHH Healthcare shedding 1.9 percent, while Axiata Group dropped 3.1 percent.

Meanwhile, government data showed Malaysia's exports fell in August for the first time in six months, hit by declining shipments of palm oil and slowing demand from the United States.

(Reporting by Niyati Shetty in Bengaluru; Editing by Subhranshu Sahu)

By Niyati Shetty