* Trading halted in Jakarta after stocks hit circuit breaker * Malaysia policy decision at 0700 GMT * Slim majority in Reuters poll expect a cut By Nikhil Nainan Sept 10 (Reuters) - Indonesian stocks plunged 5% on Thursday, prompting an automatic pause in trading, and the central bank intervened to steady the rupiah after the authorities reimposed restrictions in the capital Jakarta to stem rising COVID-19 cases. The fall in Jakarta was the biggest since March and came in contrast to most other emerging markets in Asia, which were back in positive territory after a halt in the slide in U.S. stocks overnight. Seoul shares were up 0.9%. Markets in Southeast Asia's most populous state have been struggling for two weeks due to concerns over the outbreak, growth and government moves to use the central bank to help with bond market funding. The rupiah has retreated around 1.5% since a parliamentary panel at the end of August recommended sweeping changes to Bank Indonesia's institutional setup that would give ministers more say. "This is an unexpected turn of events," Trimegah Securities said of the restrictions in a note, saying the downside on the stock index could be limited to around 10% as companies are likely better prepared after the first lockdown. Trading was halted for 30 minutes after the index fell 5%. The Indonesian capital will reinstate social restrictions similar to those used between April and June from Monday, with its governor pointing to the strain on its healthcare system as infections averaged 1,000 a day this month. Malaysian stocks fell 0.7% ahead of an interest rate decision that has economists split down the middle, a slim majority in a Reuters poll published this week predict a 25 basis points cut to a record 1.5%. Like much of the region's central banks, Bank Negara Malaysia has already cut rates by 125 bps this year, seeking to ease the coronavirus' impact on growth. Maybank analysts, who expect no change, argued BNM may look "to preserve monetary policy space amid the on-going rollout of economic stimulus and recovery measures" The ringgit inched up 0.1%. OCBC, on the other hand, expect a 25 bps cut, and said BNM may be tempted to squeeze in an insurance cut ahead of the upcoming expiry of an emergency moratorium on loan repayments. Another key policy meeting on the cards is in Europe where the ECB is expected to stand pat, though commentary on the euro's recent strength will be of interest, as Asian currencies have benefited from months of dollar weakness. Most emerging currencies in Asia were flat to slightly higher, while the rupiah fell just 0.1%. HIGHLIGHTS: ** Indonesian 3-year benchmark yields down 2.5 basis points to 4.959% ** Malaysia's 3-year benchmark yield down 0.5 basis points to 1.846% ** Top losers on the Jakarta stock index include Integra Indocabinet Tbk PT, Panorama Sentrawisata Tbk PT and Phapros Tbk PT Asia stock indexes and currencies at 0348 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY % YTD % Japan +0.08 +2.38 0.52 -2.13 China -0.10 +1.82 0.29 7.02 India +0.00 -2.92 0.00 -7.32 Indonesia -0.07 -6.15 -5.00 -22.35 Malaysia +0.14 -1.78 -0.65 -6.41 Philippines +0.08 +4.30 0.18 -23.95 S.Korea +0.29 -2.47 0.94 9.12 Singapore -0.06 -1.66 -0.24 -22.64 Taiwan +0.82 +2.79 0.67 5.80 Thailand +0.32 -4.38 0.06 -18.08 (Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Patrick Graham and Kim Coghill)
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