By Rashmi Ashok
Oct 27 (Reuters) - Malaysian shares rose on Tuesday as political tensions eased after the largest party in the ruling coalition said it would back the prime minister, providing some respite for the premier, who has faced calls to resign.
Most other Asian stock indices edged lower, as a spike in global coronavirus cases threatened to derail a quick economic recovery, even as uncertainty ramped up with just days left for the U.S. presidential election.
The United Malays National Organisation pledged to support Prime Minister Muhyiddin Yassin, tempering the political uncertainty stemming from calls for his resignation after the king rejected his request for emergency rule.
Malaysia's benchmark stock index .KLSE rose 0.5%, while the ringgit MYR= held steady after three sessions of losses.
"The king's advice for members of parliament to not continue with any irresponsible action that could undermine the stability of the current administration could quiet political noise in the near term," analysts at CGS CIMB wrote in a note.
Philippine stocks .PSI ended 1.2% lower, notching their biggest drop since Sept. 11, as investors booked gains after a massive six-session run of gains of 10%.
The peso PHP= strengthened during the session after the central bank governor said there was no immediate need to ease monetary policy further, given the slew of indicators that point towards economic recovery.
While inflation afforded the room to ease monetary policy, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said in an interview the central bank "right now is not inclined to do that".
Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said while the central bank's policy direction was largely the same as in the recent past, claims of economic recovery gaining momentum through sequentially improving economic indicators was gaining traction.
"The only flag that I may have to raise right now is a possible resurgence of the virus down the road," he said, citing a resurgence of cases in several developed nations.
Philippine shares have seen increased foreign inflows recently and the peso has held its position as the second-best performer among Asian currencies this year, as coronavirus infections remain under control and the economy reopens.
The yuan CNY=CFXS gained after data showed profit at China's industrial firms rose for a fifth straight month in September, while a return to economic growth in South Korea in the third quarter boosted the won KRW=KFTC.
** Indonesian 10-year benchmark yields are up 0.2 basis points at 6.613% while 3-year benchmark yields are down 0.5 basis points at 5.224%
** Top gainers on FTSE Bursa Malaysia Kl Index .KLSE include Hartalega Holdings HTHB.KL up 4.19% and Top Glove Corp TPGC.KL up 2.64%
** In the Philippines, top index losers are LT Group Inc LTG.PS down 4.6% and BDO Unibank Inc BDO.PS down 3.52%
Asia stock indexes and currencies at 0718 GMT
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(Reporting by Rashmi Ashok in Bengaluru)
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