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EMERGING MARKETS-Malaysian shares ease on political uncertainty; Thai baht gains

    * Graphic: World FX rates
    * Graphic: Foreign flows into Asian stocks
    * Malaysia 2021 budget on Nov. 6 key test for govt -
    * Ringgit held steady on jump in Sept trade surplus
    * Thai baht, stocks gain on better-than-expected factory
    * Indonesian markets closed for local holiday

    By Rashmi Ashok
    Oct 28 (Reuters) - Malaysian shares eased on Wednesday as
political tensions cast doubt over whether the government will
be able muster enough votes to pass the 2021 budget next week,
while broader Asian shares also fell as global coronavirus cases
raged on.
    Sentiment remained subdued as infections spiked in the
United States, Russia, France and other countries recently,
forcing many European nations to issue new restrictions, while
the looming U.S. presidential election added to uncertainty.
    Malaysia's benchmark stock index was among top
losers in the region, continuing recent declines after Prime
Minister Muhyiddin Yassin's failed bid to declare a state of
emergency sparked calls for his resignation.
    "All eyes are on the 2021 Federal Budget next week, which
comes as a key test of confidence in Prime Minister Muhyiddin
Yassin's coalition government," analysts at ING wrote.
    "We see politics continuing to exert weakening pressure on
the ringgit. We are reviewing our end-year 4.18 USD/MYR forecast
for a possible upward revision."
    While a key ally affirmed its support for him, his position
still remains precarious, with a wafer-thin majority in
parliament and no guarantee that all ruling coalition lawmakers
will vote in favour of the budget.
    Pressure on the ringgit was offset by data which
showed Malaysia's trade surplus surged in September, fuelled by
a recovery in exports and a fall in imports, which ING analysts
say is likely to remain the key life support for the currency
amidst the ongoing political uncertainty.
    Thailand's baht rose 0.3% and its benchmark stock
index added 0.5% after data showed the country's factory
output dropped a smaller-than-expected 2.75% in September.
    The Philippine peso traded a shade firmer after the
central bank governor Benjamin Diokno on Tuesday said there was
no need to ease monetary policy further given the slew of
indicators that point towards economic recovery.
    "Diokno may be holding steady as he refrains from pushing
real policy rates deeper into the red (currently at -0.5%) while
also recognizing that monetary policy has done its job as he
looks to fiscal stimulus to complement his recent measures,"
said ING's senior economist for Philippines, Nicholas Mapa.
    Mapa added that the peso would likely be supported for the
remainder of the year given increased foreign buying amid a drop
in coronavirus infections and lower corporate demand for the
dollar due to healthy dollar inflows from remittances and
portfolio flows.
    Indonesian markets were closed on account of a local holiday
and trade will resume on Nov. 2.
    ** Top losers on FTSE Bursa Malaysia Kl Index
include Hartalega Holdings Bhd down 1.75% and IHH
Healthcare Bhd down 1.36% 
    ** Top gainers on the Thailand's SETI include Thai
Energy Storage Technology 3K-BAT.BK up 29.36% and Thai Film
Industries up 20% 
    ** Malaysia's 10-year benchmark yield was up 0.5 basis
points at 2.655% and 3-year benchmark yield rose 0.5 basis
points to 1.783%​​ 

  Asia stock indexes and                               
 currencies at   0421 GMT                         
                    DAILY  YTD %               S  S YTD
                        %                  DAILY      %
 Japan              +0.14  +4.18           -0.29  -1.01
 China    <CNY=CFX  -0.07  +3.79            0.16   6.87
 India              +0.00  -3.15            0.15  -2.15
 Malaysi            +0.02  -1.71           -0.40  -5.94
 Philipp            +0.06  +4.75           -0.12  -18.0
 ines                                                 2
 S.Korea  <KRW=KFT  -0.33  +2.41            0.01   6.08
 Singapo            +0.09  -1.10           -0.48  -22.4
 re                                                   0
 Taiwan             +1.03  +5.35           -0.54   6.73
 Thailan            +0.29  -3.89            0.42  -23.1
 d                                                    5

 (Reporting by Rashmi Ashok in Bengaluru; Editing by Kim