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EMERGING MARKETS-Malaysia drops on virus jitters, other Asian equities mixed

    * Indian stocks at record high
    * Indian rupee best performer in Southeast Asia in May
    * Malaysia's ringgit ends May at the bottom in the region
    * China's yuan pulls back from a three-year high

    By Sameer Manekar
    May 31 (Reuters) - Stocks in Malaysia dropped more than 1%
on Monday, as a resurgence in coronavirus infections and an
imminent lockdown in the country dampened investors' risk
appetite, while equities in India and Indonesia advanced in a
mixed regional market.
    Currencies were largely muted in the region, though the
Taiwanese dollar and the South Korean won
strengthened about half a percent each after China's yuan
 hit its highest level since May 2018.
    Equities in Kuala Lumpur slid as much as 1.6%,
marking their worst day in two months, as a new nationwide
lockdown from June threatened to disrupt the Southeast Asian
nation's economic recovery.
    The ringgit weakened as much as 0.3%, and was on
track to lose more than a percent in May - the worst-performing
Southeast Asian currency in the month.
    The yuan, which was trading flat around 0630 GMT, has
strengthened more than 1.5% this month amid a slide in the U.S.
dollar, heavy foreign investment inflows to China and
reduced tourism-related outflows over the past couple of months.
    "Yuan-related currencies are likely to be supported by a
firmer yuan as reflected in the moves in the likes of Taiwan
dollar and South Korean won today," Mitul Kotecha, Chief EM Asia
and Europe Strategist at TD Securities, said.
    In the sub-continent, Indian shares shed early
losses to scale a fresh peak, while the rupee weakened
ahead of the fourth-quarter gross domestic product data due
later in the day.
    Economic growth in the country likely picked up in the March
quarter, a survey conducted by Reuters showed. However, strict
lockdowns due to the second wave of COVID-19 have led to a more
pessimistic view about growth in the current quarter.  

    Indian equities have added about 6% so far in May, their
best month since February. The rupee has strengthened more than
2%, making it the best performing currency in the region this
month.
    "Equity inflows coming from foreign investors are supportive
for the domestic equities. This, along with the sentiment in the
global market is why we are seeing these levels in the market,"
Arnob Biswas, FX research head at SMC Global Securities, said.
    Investors expect the Reserve Bank of India to maintain its
accommodative stance in its upcoming policy meeting on June 4,
which is further helping the rally, Biswas added.
    Shares in Jakarta added more than a percent, marking
their fourth consecutive session of gains, whereas the rupiah
 weakened 0.2%.

    
    HIGHLIGHTS:    
    ** India's 10-year benchmark yields rise 2.7 basis points to
6.030%
    ** China factory activity growth slows slightly in May;
stocks slip
    ** Thai April factory output rises most in 8 years; stocks
up
    
    
  Asia stock indexes and currencies                           
 at   0724 GMT                                         
 COUNTRY  FX RIC         FX  FX YTD    INDEX   STOCKS   STOCKS
                    DAILY %       %           DAILY %    YTD %
 Japan                +0.10   -5.89            -1.00    5.16
 China    <CNY=CFX    +0.04   +2.56              0.41     4.10
          S>                                           
 India                -0.18   +0.68              0.77    11.25
 Indones              -0.04   -1.72              1.27    -0.94
 ia                                                    
 Malaysi              -0.07   -2.78             -0.69    -2.69
 a                                                     
 Philipp              -0.07   +0.63             -0.69    -7.16
 ines                                                  
 S.Korea  <KRW=KFT    +0.41   -2.22              0.48    11.50
          C>                                           
 Singapo              +0.02   -0.10             -0.39    11.33
 re                                                    
 Taiwan               +0.65   +3.25              1.17    15.86
 Thailan              -0.06   -4.16              0.50     9.70
 d                                                     
 

 (Reporting by Sameer Manekar in Bengaluru; Editing by
Jacqueline Wong and Sherry Jacob-Phillips)
  
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