* Indian stocks up as much as 0.9%, hit 1-1/2-week high * Broader Asian equities track global rally * China shares gain after return from week-long holiday By Harish Sridharan Oct 8 (Reuters) - The Indian rupee hit its lowest in five-and-a-half months on Friday, while stocks firmed, after its central bank left key rates unchanged and reiterated the need to unwind pandemic-era stimulus only gradually to aid a nascent economic recovery. Other emerging market stocks in Asia benefited from a rise in global risk appetite as Washington approved a legislation to temporarily raise the debt limit and avert a default. The Reserve Bank of India (RBI) kept interest rates steady at a record low, as expected, and said accommodative monetary policy was needed due to an uneven economic recovery from pandemic-related shutdowns. The RBI"s dovishness dashed expectations of investors hoping it would hint at moving towards policy normalisation like some global central banks, with the rupee shedding 0.4% to hit its lowest since late-April. The currency is also under pressure due to spiking crude prices, having declined nearly 2% over the past two weeks. Any further liquidity measures over the coming RBI meetings would probably still only amount to marginal policy tweaks, said Darren Aw, Asia economist at Capital Economics. "We doubt that rate hikes will come onto the agenda until the second half of next year when the economy should be closer to full health," Aw added. Regional currencies weakened as benchmark U.S Treasury yields firmed to their highest since June ahead of a key jobs report in the United States, with the Thai baht and South Korean won falling 0.2% and 0.4%, respectively. Jakarta shares rose 0.9% to their highest since January, as investors cheered the new tax overhaul law approved on Thursday, expected to boost next year"s tax revenue by around 139.3 trillion rupiah ($9.79 billion). Meanwhile, stocks in Manila reversed early gains to hit a more than one-week low, while Malaysia, Thailand and Singapore edged higher. Chinese equities rose 0.7% on their return from a week-long hiatus, helped by encouraging service sector data and easing political tensions with the United States. Still, the focus remains on the property sector as investors wait to see if regulators take action to contain the contagion from cash-strapped Evergrande"s debt crisis. HIGHLIGHTS ** Indonesian 10-year benchmark yields up 2.6 basis points at 6.353%​​ ** Wipro Ltd was the top gainer on India"s Nifty 50 ** Top gainers on the Jakarta stock index was Nusa Konstruksi Enjiniring Tbk PT, up 31.07% Asia stock indexes and currencies at 0729 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % % DAILY YTD % % Japan -0.33 -7.79 1.34 2.20 China -0.01 +1.24 0.67 3.43 India -0.35 -2.63 0.55 27.94 Indonesia -0.13 -1.36 0.86 8.24 Malaysia +0.07 -3.80 0.16 -3.90 Philippines -0.14 -5.06 -0.64 -3.26 S.Korea -0.35 -9.07 -0.11 2.88 Singapore -0.03 -2.77 0.26 9.33 Taiwan -0.25 +1.65 -0.44 12.95 Thailand -0.24 -11.52 0.40 13.17 ($1 = 14,231.0000 rupiah) (Reporting by Harish Sridharan in Bengaluru; editing by Uttaresh.V) Our Standards: The Thomson Reuters Trust Principles.