EMERGING MARKETS-Indian stocks rally, rupee flat as RBI keeps door open to rate cuts

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indian stocks climb after cenbank vows support, holds rates * Philippine markets had priced in harsh Q2 GDP data - analysts * Indonesian rupiah weakens, large fiscal spending planned in H2 By Rashmi Ashok Aug 6 (Reuters) - India's rupee pulled back slightly while stocks rallied on Thursday after the country's central bank kept official rates on hold, but left the door open for more cuts to support an economy reeling from a surge in coronavirus cases. The consensus of analysts had leant towards a cut at the rate-setting meeting, although the Reserve Bank of India (RBI) is wrestling with a spike in inflation above its target, thanks to booming loan growth and a 10% drop in the value of the rupee. The RBI said it was watching for a "durable" reduction in inflation that could give it a window to use available policy space later if needed, and vowed to keep the policy stance accommodative for "as long as necessary to revive growth". "Our view is that inflation will drop sharply over the coming months as the collapse in demand more than offsets supply constraints," said Shilan Shah, senior India economist at Capital Economics, Singapore. "Indeed, the RBI has maintained its "accommodative" policy stance today and Governor (Shaktikanta) Das stated that further policy space is available. We are still forecasting a further 50 basis points of cuts before the end of the year." The rupee held its ground at around 74.850 against the dollar, while stocks rose around 1%. Elsewhere in Asia, a robust performance overnight on Wall Street helped most of the region's stock and currency markets gain, with the Taiwan dollar leading the pack, up 0.6%. Manila led the gains in stocks as investors brushed off data that showed the Philippines economy plunged by much more than expected in the second quarter, slipping into recession for the first time in three decades. "The market has widely priced in the double-digit contraction in 2Q GDP as the PSI has been lagging versus its peers," said Jennifer Lomboy, fund manager at First Metro Asset Management. The index is down about 25% so far this year, making it Asia's worst performer by a wide margin. The Indonesian rupiah was among the losers, falling in the wake of data that showed its economy shrank for the first time since 1999, prompting bets of further monetary easing. Finance Minister Sri Mulyani Indrawati's comments that the central bank and financial authorities would go "all out" to boost growth though aggressive fiscal spending in the second half helped stocks add almost 1%, but weighed on the rupiah. HIGHLIGHTS ** Investors stacked up bullish bets on most Asian currencies, a fortnightly Reuters poll found. ** In the Philippines, top index gainers were Puregold Price Club Inc up 4.17% and Manila Electric Co up 3.33% ** Top gainers on the Singapore STI included Yangzijiang Shipbuilding Holdings Ltd up 3.21% and Jardine Strategic Holdings Ltd up 3.1% Asia stock indexes and currencies at 0741 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.00 +2.88 -0.43 -5.24 China <CNY=CFX -0.15 +0.26 0.26 11.03 S> India +0.09 -4.66 1.30 -7.58 Indonesia -0.41 -4.80 1.14 -17.6 9 Malaysia +0.10 -2.32 0.78 -0.53 Philippines +0.04 +3.26 1.18 -24.4 7 S.Korea <KRW=KFT +0.45 -2.29 1.33 6.60 C> Singapore -0.01 -1.84 1.18 -20.4 9 Taiwan +0.16 +2.20 0.87 7.64 Thailand -0.29 -3.80 0.53 -14.9 0 (Reporting by Rashmi Ashok in Bengaluru; Editing by Patrick Graham and Arun Koyyur)