Malaysia c.bank holds rate at 1.75% * S.Korea shares record worst day in 3 weeks * Asian equities track Wall Street weakness By Harish Sridharan Sept 9 (Reuters) - Malaysian shares headed for their worst day in more than a month on Thursday, tracking weakness in Asia markets on worries over the pace of economic recovery, even as the country"s central bank kept rates steady as expected. Equities in the broader region came under pressure following overnight losses on Wall Street, as cautious sentiment stemmed from worries that the Delta coronavirus variant could blunt economic recovery, while the latest regulatory crackdown in China also weighed on markets. Bank Negara Malaysia (BNM) held its overnight policy rate steady at a record low of 1.75%, pinning hopes on rising COVID-19 vaccination rates to propel a rebound. "The stance was already accommodative, and the central bank is waiting to see how economic activity data pans out," said Sim Moh Siong, FX strategist at Bank of Singapore. "We are not really at a point where the economy has heated up so much that BNM will consider tightening." Shares in Kuala Lumpur dropped 1.1%, their biggest fall since July 30, while the ringgit gained 0.1%. Elsewhere in Asia, South Korean shares closed 1.5% lower, their worst session since Aug. 19, after policymakers hinted at further tightening on rising inflationary pressures. The won weakened 0.2%. Most other currencies in the region logged gains, with the Philippine peso, Taiwanese dollar and Thai baht up between 0.1% to 0.4%, even as the U.S dollar firmed. Adding to investor worries, China"s government on Wednesday summoned gaming firms to ensure new rules for the sector are implemented and said it would crack down on illegal behaviour in the ride-hailing industry. Thailand"s deputy prime minister said the country"s economy should grow this year, picking up pace in the third and fourth quarters, after the easing of tougher virus restrictions. Shares in the country, however, dropped 0.5%. The baht edged higher. HIGHLIGHTS ** Indonesian 10-year benchmark yields are up 3.4 basis points at 6.186%​​ ** Top loser on FTSE Bursa Malaysia Kl Index was Top Glove Corporation Bhd, down 5.03% ** Taiwan shares close 0.2% higher, snaps 3-day losing streak Asia stock indexes and currencies at 0738 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCK DAILY YTD % DAILY S YTD % % % Japan +0.28 -6.08 -0.57 9.34 China +0.00 +1.04 0.49 6.34 India -0.03 -0.76 -0.17 23.90 Indonesia -0.07 -1.54 0.17 0.96 Malaysia +0.11 -3.10 -1.09 -2.88 Philippines +0.35 -3.89 -0.37 -3.02 S.Korea -0.21 -7.10 -1.53 8.40 Singapore +0.02 -1.80 0.11 8.04 Taiwan +0.15 +2.81 0.20 17.46 Thailand +0.09 -8.44 -0.48 12.65 (Reporting by Harish Sridharan in Bengaluru; Editing by Ramakrishnan M.)