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EMERGING MARKETS-Malaysian stocks, ringgit slip as political tension weighs

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3lKhL5I
    * Ringgit dips 0.2%, Malaysian stocks off nearly 0.8% 
    * Emergency request rejection spares economic crisis -
Mizuho
    * Taiwan dollar at two-week high, up 1.1%

    Oct 26 (Reuters) - Malaysian stocks stumbled on Monday as
political uncertainty in the Southeast Asian nation grew after
the king rejected a request by the prime minister to declare a
state of emergency in response to the coronavirus crisis.
    Broader Asian stocks and currencies were subdued, as a surge
in coronavirus cases in the United States and Europe threatened
hopes for a global economic recovery, adding to uncertainty
posed by the looming U.S. presidential election.

    Malaysian King Al-Sultan Abdullah's rejection on Sunday of
the request for the emergency on Sunday is a major setback for
Prime Minister Muhyiddin Yassin, who is facing a leadership
challenge from an opposition leader and infighting within his
ruling coalition.
    The king's rejection has arguably spared the country a
deeper political and consequent economic crisis, analysts at
Mizuho wrote, noting that the emergency request could be
construed as a backdoor for the prime minister to retain
control.
    "The real danger is that a state of emergency, if construed
as an undemocratic tool to out-manoeuvre, will inadvertently
exacerbate the PM's political woes, potentially plunging
Malaysia into deeper political uncertainty."
    The ringgit shed more than 0.2% against the dollar to
stand at a near four-week low, extending losses of around 0.3%
sustained on Friday after talk of the state of emergency request
first surfaced.
    The Malaysian stock index slipped 0.8% to its lowest
since Sept. 11, with glove maker Top Glove Corp the
biggest loser, down 2.5%. 
    Malaysia has seen a resurgence in coronavirus cases
recently, just as businesses and workers try to recover from the
economic blow of pandemic-led lockdowns.
    Thai shares struggled to hold on to gains and the
baht dipped slightly after a holiday-extended weekend,
as protests demanding the resignation of Prime Minister Prayuth
Chan-ocha continued.
    Shares had recovered slightly on Thursday after an emergency
decree aimed at ending months of protests against Chan-ocha's
government and the monarchy was revoked, after it brought tens
of thousands of people on to Bangkok's streets.
    Taiwan's dollar was among the most sought after
currencies in the session, gaining more than 1.1% to touch a
two-week high. 
    The currency is the region's top performer so far this year
with a 5.2% gain, as the work-from-home shift fuelled demand for
the country's key chip and semiconductor exports, offering a
buffer to the economic blow from the pandemic.
    
    HIGHLIGHTS
    ** Top gainers on the Jakarta stock index include
Provident Agro Tbk PT, up 21.94%, and Sky Energy
Indonesia Tbk PT, up 20.69% 
    ** In the Philippines, top index gainers were DMCI Holdings
Inc, up 3.29%, and Puregold Price Club Inc, 
up 2.82% 
    ** Indonesian 10-year benchmark yields fell 1.8 basis points
to 6.6%​​, while 3-year benchmark yields eased 3.2 basis points
to 5.23%​​ 
    
  Asia stock indexes and                               
 currencies at   0448 GMT                         
 COUNTRY  FX RIC       FX     FX    INDEX  STOCK  STOCK
                    DAILY  YTD %               S  S YTD
                        %                  DAILY      %
                                               %  
 Japan              -0.21  +3.53           -0.15  -0.74
 China    <CNY=CFX  +0.01  +4.15           -0.72   6.70
          S>                                      
 India              -0.12  -3.16           -0.24  -2.19
 Indones            +0.03  -5.22            0.71  -18.2
 ia                                                   7
 Malaysi            -0.22  -1.80           -0.52  -6.41
 a                                                
 Philipp            +0.06  +4.71            0.14  -16.9
 ines                                                 1
 S.Korea  <KRW=KFT  +0.39  +2.47           -0.29   7.11
          C>                                      
 Singapo            -0.12  -1.07           -0.10  -21.3
 re                                                   4
 Taiwan             +1.06  +5.21            0.18   7.70
 Thailan            -0.03  -4.38           -0.09  -23.2
 d                                                    5
 

 (Reporting by Rashmi Ashok in Bengaluru; Editing by Muralikumar
Anantharaman)
  
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