* MAS tightens monetary policy for 2nd time this year * Malaysia rises after 7 straight sessions of falls By Niyati Shetty Oct 12 (Reuters) - Southeast Asian stock markets edged higher on Friday, recovering from the previous session's sharp falls after a weaker-than-expected rise in U.S. inflation for September partly tempered expectations of more aggressive Federal Reserve interest rate hikes. The U.S. Consumer Price Index rose 0.1 percent last month after climbing 0.2 percent in August. Excluding the volatile food and energy components, the CPI edged up 0.1 percent for the second straight month, after gaining 0.2 percent in May, June and July. Asian shares appeared tentative, holding steady after a nine-session losing streak, but sentiment was frail after Wall Street shares crumbled and expectations of market volatility shot up to an eight-month high. Indonesian shares gained up to 1.2 percent, boosted by financials and telecoms. Bank Central Asia rose 2.5 percent, while Telekomunikasi Indonesia climbed 2.2 percent. This is primarily driven by U.S. inflation data as investors were dying for any kind of relief, said Taye Shim, head of research at Mirae Asset Sekuritas. Since Indonesia is a domestic driven economy, it reinforced investor confidence a little bit more, he added. "However, it is a very fragile recovery and investors should not be overly excited... The market itself will remain volatile until the end of the year," he said. Worries about the economic impact of Sino-U.S. trade spat, a spike in U.S. bond yields this week and caution ahead of the earnings season are all cited as potential reasons behind Thursday's selloff. Malaysian stocks rose as much as 0.8 percent, posting their sharpest intraday gain in a month and heading for their first session of gain in eight. Tenaga Nasional climbed 2.7 percent, while Malayan Banking gained 1.9 percent. Philippine shares rose up to 0.8 percent, helped by consumer staples. Universal Robina Corp gained 3.9 percent, while conglomerate Ayala Corp gained 1.4 percent. Singapore shares climbed over half a percent after six straight sessions of declines. Meanwhile, the Monetary Authority of Singapore tightened its monetary policy for the second time this year, in line with expectations, saying the city-state's economy is likely to expand steadily barring a setback to global growth from trade frictions between the United States and China. Keppel Corp gained 1.3 percent, while Jardine Matheson rose 1.2 percent. For Asian Companies click; SOUTHEAST ASIAN STOCK MARKETS AS AT 0412 GMT Market Current Previous close Pct Move Singapore 3053.08 3047.39 0.19 Bangkok 1693.04 1682.89 0.60 Manila 6938.54 6884.38 0.79 Jakarta 5753.645 5702.822 0.89 Kuala Lumpur 1722.47 1708.49 0.82 Ho Chi Minh 956.43 945.89 1.11 Change on year Market Current End 2017 Pct Move Singapore 3053.08 3402.92 -10.28 Bangkok 1693.04 1753.71 -3.46 Manila 6938.54 8558.42 -18.93 Jakarta 5753.645 6355.654 -9.47 Kuala Lumpur 1722.47 1796.81 -4.14 Ho Chi Minh 956.43 984.24 -2.83 (Reporting by Niyati Shetty in Bengaluru; Editing by Subhranshu Sahu)