London - Emerging shares sank to a six-week low on Wednesday, pressured by lacklustre Chinese stocks, while Turkish debt insurance costs hit 2013 highs following days of protests.
South African bond yields also jumped on a bearish outlook from the central bank.
MSCI's emerging shares benchmark fell 0.7 percent, extending a losing streak to hit a six-week low.
Emerging stocks have had a tough run of sessions in the last two weeks, hampered by weaker data from China and speculation about the US Federal Reserve tapering its monetary easing programme in the next few months.
China's services PMI for May was slightly stronger than expected at 51.2, denoting expansion though market reaction was muted. Shanghai shares were headed for their fifth straight session of losses, dragged lower by the banking sector.
Markets are keeping a keen eye on developments in Turkey, where violent protests across the country knocked 10 percent off the Istanbul bourse on Monday. Turkish stocks eased 0.3 on Wednesday while five-year credit default swaps rose to November 2012 highs of 148 bps, according to Markit.
“We tend to think that the equity market could remain weak for a prolonged period of time, as we fail to see so far how the authorities are going to handle the situation smoothly,” said Matthieu Belondrade, fund manager at Natixis Asset Management.
Yields on South Africa's government bonds jumped more than 20 basis points as the market digested Tuesday's bearish outlook from the country's central bank.
The rand weakened 0.5 percent towards the psychologically key 10 per dollar level on Wednesday.
“The reaction ... is on the back of the outlook showing that the central bank is very reluctant to think about rate cuts and also showing some level of disengagement when it comes to price action in the South African rand,” said Luis Costa, director of emerging markets strategy at Citi.
“South Africa is selling off much more than everybody else in the region ... so we are back to state zero where you believe the central bank will let the rand go.”
Markets expect the central bank of Poland to cut its main lending rate by 25 basis points to 2.75 percent on Wednesday. The zloty was unchanged ahead of the rate decision. - Reuters