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EMERGING MARKETS-Malaysia ringgit, stocks surge on hopes of political breakthrough

* Ringgit eyes best day in 2 weeks * Kuala Lumpur stocks set for best day in 15 months * Most Asia FX firm after Fed minutes By Himanshi Akhand Nov 24 (Reuters) - Malaysia's ringgit posted its best day in almost two weeks and equities rose 2% on Thursday amid signs of a breakthrough in the political stalemate that left the country still struggling to form a new government five days after a general election. The ringgit rose as much as 1.5% and was on track for its best day since Nov. 11. Stocks in Kuala Lumpur were set for their best session since August 2021. Malaysia's former ruling coalition indicated that it may support opposition leader Anwar Ibrahim as prime minister, reversing a decision to stay neutral. The coalition's biggest component party said it would not support ex-premier Muhyiddin Yassin's alliance, but did not make any reference to Anwar. Galvin Chia, an emerging markets strategist at Natwest Markets, also attributed the ringgit's gains to broader market optimism, with most Asian assets trading higher after the U.S. Federal Reserve's latest minutes raised expecations of milder rate hikes. "Part of it is just and catching up to the broader price movements," Chia said. "On the one hand, you're getting more talk about a potential coalition coming out, while on the other hand, there is a bit of scepticism to say how stable can any of these governing coalitions ultimately be and what's that going to mean for policy." Malaysia's king will meet with other senior royals on Thursday to help decide who will become prime minister. Other currencies and equities in the region benefited after minutes of the Fed's November meeting showed that most officials agreed it would soon be appropriate to slow the pace of policy tightening. The Thai baht, Indonesian rupiah and Singaporean dollar added between 0.4% and 0.9%. Stocks in Indonesia, the Philippines and India advanced between 0.2% and 0.6%. "Market sentiment in the region may continue to find comfort that the minutes have done little in driving more hawkish interest rate expectations," Yeap Jun Rong, market strategist at IG, wrote. Singapore's FTSE Strait Times index was the only laggard, inching lower for a second consecutive day. South Korea's central bank, which has been a front-runner in withdrawing pandemic-era stimulus in the region, raised interest rates by a relatively modest 25 basis points, slowing its pace. The won rose 2% and South Korean stocks climbed 0.6%. HIGHLIGHTS ** Malaysia's 10-year benchmark yield is down 0.1 basis point at 4.322% ** Top gainers on FTSE Bursa Malaysia Kl Index include Axiata Group Bhd and Top Glove Corporation Bhd ** Malaysia's Oct CPI data due on Friday Asia stock indexes and currencies at 0411 GMT COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan +0.62 -17.0 <.N2 1.05 -1.33 5 25> China 7 EC> India +0.17 -9.03 <.NS 0.19 5.47 EI> Indonesi +0.32 -8.86 <.JK 0.54 7.77 a SE> Malaysia +1.33 -7.71 <.KL 1.93 -6.14 SE> Philippi -0.05 -10.1 <.PS 0.24 -8.38 nes 2 I> S.Korea 5 11> Singapor +0.28 -1.74 <.ST -0.09 4.14 e I> Taiwan +0.59 -10.7 <.TW 0.69 -19.27 8 II> Thailand +0.85 -7.07 <.SE 0.05 -1.96 TI> (Reporting by Himanshi Akhand in Bengaluru; Editing by Edmund Klamann)