EMERGING MARKETS-Thai baht extends losses after rate hike; recession woes hurt Asia FX

* Thai central bank hikes rates by 25 bps, as expected * South Korean won, shares lead losses * Indian rupee hits record low * Indonesia's rupiah at over 2-yr low By Upasana Singh Sept 28 (Reuters) - Thailand's baht extended losses on Wednesday after the country's central bank hiked interest rates by 25 basis points (bps) in a widely anticipated move, while other currencies in the region also weakened against the U.S. dollar. The Bank of Thailand (BOT), which has lagged its regional peers in the scale of monetary tightening, raised its key rate for a second straight meeting, in a bid to tame inflation and ensure a continued economic recovery. The baht shed 0.9%, while equities in Bangkok dropped 0.5% after the decision. The baht, which has lost about 12.8% so far this year, lingered at its lowest level in more than 16 years. The central bank's decision was in line with a Reuters poll of economists. About 22 of the 25 those surveyed had predicted the BOT would raise rates by 25 bps, while three had projected a bigger 50 bps hike. "We were looking for something a bit more aggressive. The fact that they (BOT) only went 25 (bps) has already prompted a negative reaction in the baht and clearly we've seen quite a sharp weakening since the decision," said Mitul Kotecha, Head of EM Strategy at TD Securities. The rate hike also comes after inflation in the tourism-reliant economy touched a 14-year high in August, and a weaker currency exacerbated the price pressures by raising the cost of imports. "The risk is certainly there that they (BOT) will need to hike more aggressively," Kotecha said. Meanwhile, the U.S. Federal Reserve's ever more hawkish outlook on policy tightening raised global recession fears and cast a shadow over Asian emerging markets. Prospects of further rate hikes by central banks worldwide, a weak sterling due to large unfunded UK tax cut plans, and an unrelenting rally in the U.S. dollar continued to weigh on risk-sensitive Asian emerging currencies. South Korea's won and the country's benchmark index were the lead decliners in the region as they fell 1.3% and 2.5%, respectively. The Indian rupee and Singapore's dollar depreciated 0.4% and 0.5%, respectively. Equities in Mumbai and Singapore shed 0.1% and 1.4%. The dollar index, which measures the greenback against a basket of currencies, gained 0.4% to 114.61, and earlier hit a new two-decade high of 114.70. Indonesia's rupiah weakened 1% to hit a more than two-year low, even as an official said the country's central bank has continued with its "triple intervention" to guard against excessive falls in the rupiah exchange rate. Stocks in Jakarta rose 0.3% and were the only bright spot among the region's equities. China's yuan fell 0.7%, its weakest since January 2008, while equities in Shanghai dropped 1.6%. HIGHLIGHTS: ** Thai factory output rises 14.52% in August, beats forecast ** India's RBI likely sells dollars as surging U.S. yields hold rupee hostage - traders ** S.Korea to buy back 2 trln won treasury bonds - vice fin min The following table shows rates for Asian currencies against the dollar at 0728 GMT. COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan +0.08 -20.4 <.N2 -1.50 -9.09 4 25> China 9 EC> India -0.40 -9.25 <.NS -0.09 -2.09 EI> Indonesi -0.98 -6.68 <.JK 0.30 8.39 a SE> Malaysia -0.32 -9.95 <.KL -0.46 -10.41 SE> Philippi +0.14 -13.5 <.PS -2.33 -17.45 nes 7 I> S.Korea 4 11> Singapor -0.53 -6.74 <.ST -1.40 -0.08 e I> Taiwan -0.34 -13.1 <.TW -2.61 -26.09 7 II> Thailand -0.85 -12.7 <.SE -0.46 -3.29 9 TI> (Reporting by Upasana Singh in Bengaluru)