* Malaysia's economy posts biggest annual decline since 1998
crisis
* China, Japan, South Korea and Taiwan markets closed
* Philippine c.bank meeting due later in the day
By Shruti Sonal
Feb 11 (Reuters) - Malaysia shares pared gains on Thursday
as its economy fell at a faster-than-expected pace in the fourth
quarter, while other emerging Asian markets were muted in thin
trade, with multiple countries already shut for the Lunar New
Year holidays.
The Kuala Lumpur benchmark .KLSE , which had climbed as
much as 0.4% earlier in the session, was trading flat by 0421
GMT.
Malaysia's economy contracted 3.4% year-on-year in the
December quarter, falling for a third straight quarter and
faster than the 3.1% decline forecast in a Reuters poll.
Strict coronavirus-related restrictions hurt domestic
consumption and slowed the pace of recovery, the central bank
said, pushing the economy to its the worst annual performance
since the 1998 during the Asian Financial Crisis. However, growth will rebound going into 2021, supported by a
pickup in global demand and normalisation in domestic economic
activities, said Bank Negara Malaysia governor Nor Shamsiah Mohd
Yunus.
Philippine shares .PSI shed 0.8%, ahead of the central
bank's monetary policy meeting later in the day, at which it is
widely expected to hold rates.
"We expect BSP to keep its policy rate at 2.0% to provide
further monetary support for the time being but we do not
discount a possible reversal should inflation remain elevated
over the coming months," ING analysts said.
Elsewhere, stocks were mixed as investors treaded
cautiously, with China, Japan, South Korea and Taiwan all on
holiday. Most other markets in the region will be closed on
Friday.
Thailand .SETI fell 0.6%, while India .NSEI and
Indonesia .JKSE climbed 0.3% and 0.1% respectively.
Foreign investment applications in Thailand dropped 54% to
213 billion baht ($7.12 billion) last year as companies were
deterred by the COVID-19 pandemic, while the outlook for 2021
remains uncertain, an investment agency said on Wednesday.
Broader Asian shares rested at record highs as investors
digested recent meaty gains and hoped for more global stimulus,
with MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS up 0.1%.
Moves in regional currencies were range-bound even as the
dollar was pinned near two-week lows, with softer-than-expected
U.S. inflation and another Federal Reserve promise to keep
interest rates low weighing the greenback. FRX/
"In our view, the Fed stance is still extremely dovish, and
this fundamentally holds back the bullish-USD story", OCBC
Treasury Research analysts wrote.
Eyes were also on U.S. President Joe Biden as he spoke to
his Chinese counterpart Xi Jinping on Wednesday, his first
direct contact with the leader since winning the November U.S.
presidential election and taking office last month. Singapore's 10-year benchmark yield is down 3.1 basis
points at 1.018%
** Top losers on Thailand's SETI .SETI include Union
Plastic PCL UP.BK ; TU Dome Residential Complex Leasehold
Property Fund TU-PFu.BK ; TRC Construction PCL TRC.BK
Asia stock indexes and currencies
at 0452 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY YTD % DAILY % YTD %
%
Japan JPY= -0.02 -1.29 .N225 0 7.72
China
(Editing by Gerry Doyle)