Emerging Markets - Asian FX take breather after rally; S. Korean won snaps winning streak

BANGKOK (Reuters): South Korea's equities and the won currency fell sharply on Tuesday after a recent rally as it announced a ban on short selling of shares, while other emerging Asian equities and currencies also declined.

The South Korean won fell 0.8% against the dollar, snapping a three-day winning streak, while stocks in Seoul were down 3% after four consecutive sessions of gains.

South Korea on Sunday re-imposed a ban on short-selling shares, at least until June, starting Monday. The ban had helped shares to rally.

"With risk-reward remaining amongst the most favourable in Asia and re-acceleration in semiconductor sector growth cycle gaining pace, we think that the short selling ban could further add to tailwinds for the market," analysts at Societe Generale said.

Elsewhere, the Malaysian ringgit dropped 0.7%, while the Indonesian rupiah eased 0.4%. Stocks in Jakarta eased 0.6%.

Analysts at Maybank expect further downside to the USD-MYR pair as the U.S. dollar index and U.S. Treasury yields continue to pull back.

Indonesia on Monday reported solid economic growth in the third quarter, although its pace eased more than expected to its weakest in two years.

"We expect Bank Indonesia (BI) to hold the policy rate in the 22-23 Nov meeting, provided that the rupiah maintains its stability in the lead up to the meeting," Maybank said in a note.

"Currency depreciation has slowed over the past two weeks, with the rupiah strengthening back to early October levels following the Federal Reserve meeting on Nov. 1," Maybank added.

Among other countries, annual inflation in the Philippines slowed for the first time in three months in October mainly due to slower increases in food prices, data showed.

The inflation print will likely ease pressure on the central bank, which meets next on Nov. 16, to decide on its monetary policy. Another deciding factor will be Thursday's economic growth data.

The peso was trading 0.4% down while stocks in Manila gained 0.1%. In contrast to South Korea, the Philippine stock exchange launched its short-selling programme on Monday.

"This is the culmination of extensive efforts on the part of the stock exchange launching its securities financing solution that provides a short-selling infrastructure to market participants," said Stephen Howard, CEO of Pan Asia Securities Lending Association.

Elsewhere in the region equities were trending lower, with stocks in Singapore and India both falling 0.3%. Equities in Taiwan and Thailand were largely flat. - Reuters