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EMERGING MARKETS-Asian stocks, FX weaken as Poland blast keeps markets on edge

* Philippine stocks break 3-day winning streak * Korean won leads losses among Asia FX * Indonesian shares hit near 1-month low By Navya Mittal Nov 16 (Reuters) - Emerging Asian currencies and stock markets skidded on Wednesday amid fears of escalating geopolitical tension after NATO-member Poland reported an explosion by what it called a Russia-made missile. A missile that killed two people in Poland was probably not fired from Russia, U.S. President Joe Biden said after an emergency meeting of NATO leaders. Russia denied it was responsible for the explosion. The South Korean won and Indonesian rupiah shed 0.6% each, leading losses as reports of the explosion triggered an outflow from risk-sensitive emerging markets into the U.S. dollar which posted its sharpest fall in seven years late last week. "The missile strike in Poland provided markets the excuse to cover the outsized USD sell-off in the past two weeks... I think this is premature" said Philip Wee, FX Strategist at DBS Bank. The Philippine peso and Indian rupee slid about 0.3% each against a firming greenback, while Malaysia's ringgit reversed earlier gains to inch lower. Stocks across Asia were also pressured. Equities in Jakarta hit a near one-month low, Malaysia's benchmark index fell for the third straight session, and shares in Manila snapped a three-day wining streak. Risk sentiment was further dampened by the chief of the World Trade Organization warning that many major economies would likely face a recession as the war in Ukraine, rising food and fuel costs, and soaring inflation cloud the global outlook. "This year's aggressive rate hikes should hit the world economy mainly in 2023.... We recommend bonds over stocks, as well as a healthy allocation to cash," Barclays analysts wrote. Meanwhile, news of the Poland explosion and its potential implications took some focus away from two key regional central bank meetings due on Thursday. Markets have already priced in a 75-basis-point interest rate hike in the Philippines and a 50-basis-point rise in Indonesia. Malaysia is also due to hold an election this weekend, which analysts said could trigger some near-term volatility in the ringgit. "There could still be quite a bit of uncertainty in terms of policy making that could reverse some of the MYR gains in the near-term," Maybank analysts said in a note. The currency had strengthened nearly 4% since Friday as the dollar weakened due to softer U.S. inflation data and amid an improvement in broader sentiment after China eased some of its stringent COVID restrictions. HIGHLIGHTS ** G20 talks enter final day as emergency meeting held over blast in Poland ** Indonesian 10-year benchmark yields are down 4 basis points at 7.003%​​ ** Boats carrying more than 200 Rohingya refugees land in Indonesia Asia stock indexes and currencies at 0545 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY YTD % % Japan -0.33 -17.6 0.14 -2.65 5 China -0.48 -10.2 -0.40 -14.23 2 India -0.32 -8.63 0.18 6.24 Indonesi -0.57 -8.79 -0.58 6.28 a Malaysia -0.11 -8.18 -0.68 -8.10 Philippi -0.31 -11.2 -0.79 -10.59 nes 3 S.Korea -0.66 -10.3 -0.30 -16.95 7 Singapor -0.03 -1.58 -0.06 4.79 e Taiwan -0.14 -11.1 -0.17 -20.29 0 Thailand -0.38 -6.39 -0.49 -2.19 (Reporting by Navya Mittal; Editing by Ana Nicolaci da Costa and Dhanya Ann Thoppil)

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