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EMERGING MARKETS-Malaysian stocks extend gains on budget approval; Asia FX await Fed

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3lKhL5I
    * Indonesian shares hit over 10-month high
    * S. Korean shares set to snap two-day losing streak
    * Malaysian stocks poised for second day of gains 

    By Shriya Ramakrishnan
    Dec 16 (Reuters) - Malaysian shares extended gains on
Wednesday after the country's parliament approved a budget aimed
at spurring economic activity, while Asian currencies traded in
a narrow range as investors awaited cues from the U.S. Federal
Reserve.
    Regional share markets rose in line with their broader Asian
peers, as continued progress on the roll-out of COVID-19
vaccines and growing prospects of more U.S. fiscal stimulus
lifted risk sentiment.
    Malaysian stocks jumped as much as 1.3%, with gains
on the benchmark index dominated by shares of financial firms
and glove makers. 
    Lawmakers in the country approved the government's 2021
budget, which includes a record 322.5 billion ringgit  ($79.65
billion) in spending next year, as it seeks to lift activity in
an economy badly hit by the coronavirus pandemic. 
    "We expect 2021 to be a better year for the
market..additional liquidity from the government stimulus
announced in Budget 2021 could help boost retail interest in the
market and cultivate stronger animal spirits," analysts at
trading firm CGS CIMB wrote in a note.
    The passage of the budget could also signal a firmer footing
for Prime Minister Muhyiddin Yassin, whose eight months in
office have been beset by infighting in his ruling coalition and
a leadership challenge from opposition leader Anwar Ibrahim.
    Indonesian shares climbed 1.5% to hit their highest
level since Jan. 30, while South Korea's KOSPI was set
to snap a two-day losing streak.
    Sentiment in South Korea also improved as the country's
prime minister pledged to secure more hospital beds to handle a
record surge in COVID-19 cases and blunt a corresponding spike
in deaths.
    In currency markets, investors were focused on the outcome
of the U.S. central bank's final policy meeting of the year,
where it expected to keep its overnight interest rate pinned
near zero and to signal it will stay there for years to come.

    Analysts said the decision could further boost investors'
confidence for risk-taking.
    The dollar index, which measures the greenback against a
basket of currencies, hovered near 2-1/2 year lows. The
Philippine peso, S. Korean won and Malaysian
ringgit edged higher.
    The Indonesian rupiah and the Philippine peso
were largely steady ahead of their respective central bank
meetings on Thursday. 
    Analysts polled by Reuters expect Bank Indonesia to keep its
key interest rate unchanged at a record low of 3.75%, having cut
rates five times this year.
    
    HIGHLIGHTS:
    ** Malaysia's 10-year benchmark yield is down 2.19 basis
points at 2.735%
    ** Top gainers on the Jakarta stock index include
Zebra Nusantara Tbk PT, up 33.33% at 100 rupiah,
Apexindo Pratama Duta Tbk PT up ​25% at 530 rupiah
    ** Top gainers on FTSE Bursa Malaysia Kl Index
include Hartalega Holdings Bhd up 5.34% at 12.62
ringgit, Top Glove Corporation Bhd up 5.3% at 6.75
ringgit, Telekom Malaysia Bhd up ​3.21% at 5.47
ringgit
    
    
    
  Asia stock indexes and                                    
 currencies at   0434 GMT                             
 COUNTRY   FX RIC         FX     FX     INDEX  STOCK  STOCKS
                       DAILY  YTD %                S   YTD %
                           %                   DAILY  
                                                   %  
 Japan                 +0.15  +4.94             0.12   12.95
 China                 -0.04  +6.44             0.18   10.59
 India                 +0.19  -2.88             0.67   12.25
 Indonesi              -0.07  -1.56             1.47   -3.19
 a                                                    
 Malaysia              +0.05  +0.96             0.72    6.12
 Philippi              +0.05  +5.40             0.22   -7.32
 nes                                                  
 S.Korea               +0.11  +5.89             0.48   26.04
 Singapor              +0.04  +0.96             0.40  -11.01
 e                                                    
 Taiwan                +1.12  +6.97             1.59   19.12
 Thailand              -0.07  -0.50             0.29   -6.23
 
($1 = 4.0490 ringgit)

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Sam
Holmes)
  
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