EMERGING MARKETS-Malaysia stocks at 5-month low on political risks, region awaits U.S. election

    * Malaysia stocks fall 1% as central bank, budget loom
    * U.S. election on November 3 fuels caution
    * China, South Korea factory activity expand in October

    Nov 2 (Reuters) - Malaysian stocks hit their lowest in more
than five months on Monday as political uncertainty remained
high ahead of a central bank meeting and the country's budget,
while Asia's other emerging markets kept to tight ranges.
    Factory activity in South Korea and China showed a robust
recovery in October with shares in Seoul up 1%, the most
in the region, while Shanghai dipped ahead of the U.S.
    Traders face a busy week as a surge in COVID-19 cases sends
many European countries back into lockdown, threatening further
economic pain for the global economy, while the prospect of a
contested U.S. election on Tuesday could lead to days, if not
weeks, of uncertainty.
    OCBC analyst said Asian markets face a mixed start to the
week from "potentially whippy action as investors remain nervous
about the upcoming U.S. election results."
    The election could open the door to friendlier U.S. trade
and foreign policy to some if Democratic candidate Joe Biden
wins, potentially dialling back tensions with China, the world's
second-largest economy and key driver for the region. 
    In Kuala Lumpur, stocks fell as much as 1%, while
the ringgit was flat. 
    On Tuesday, Malaysia's central bank is expected to leave its
policy rate unchanged and on Friday the government will present
its first budget focussed on tackling the pandemic's fallout. 
    Over the weekend, Malaysia's prime minister urged lawmakers
to pass the 2021 budget, in spite of efforts by the opposition
to oust his government and pressure from unhappy partners within
the governing coalition.
    "The upcoming budget has become a contentious political
issue," ING said in a note, with the prospect of the budget not
passing fuelling fears of yet another political crisis.
    Currencies in the region also stuck to tight ranges ahead of
the U.S. election, with the Chinese yuan up 0.1%,
while Indonesia's rupiah dipped 0.2%. 
    Biden leads polls nationally, but faces a tighter contest
from Republican President Donald Trump in battleground states
that will eventually decide the outcome. 
    "Even a small decline in Biden's probability of winning – in
the event of delay in being able to call the election, with or
without the prospect of a contested result – could evince an
outsized reaction in Asian FX," analysts at Deutsche Bank said,
pointing to dollar gaining.
    Markets in the Philippines were closed for a public holiday.
    ** Malaysia's 10-year benchmark yield up 0.4 basis points to
    ** Top losers on Bursa Malaysia include Top Glove
Corp Bhd, Dialog Group Bhd  and Sime Darby
    ** Wilmar International jumps 5% in Singapore
after reporting strong third-quarter results on Friday

           Asia stock indexes and currencies at 0346 GMT
 COUNTRY      FX RIC      FX       FX     INDEX    STOCKS   STOCKS
                          DAILY %  YTD %           DAILY %  YTD %
 Japan                    -0.02    +3.77           1.42     -1.49
 China                    +0.06    +4.10           -0.05    5.66
 India                    +0.00    -3.67           0.00     -4.32
 Indonesia                -0.20    -5.26           -0.15    -18.71
 Malaysia                 -0.02    -1.52           -0.76    -8.37
 Philippines              -        +4.51           -        -19.08
 S.Korea                  +0.03    +1.90           1.01     4.20
 Singapore                -0.07    -1.65           0.62     -24.32
 Taiwan                   +1.12    +5.25           -0.32    4.24
 Thailand                 +0.00    -4.01           0.02     -24.35
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Lincoln Feast.)