Jakarta - Emerging-market stocks extended their longest weekly losing streak in more than a year on concern Europe’s slowdown will hurt global growth.
South Korea’s won and Russia’s ruble led currencies lower.
PetroChina dragged a gauge of Hong Kong-traded Chinese shares to a three-month low and Lukoil led declines in Russia as oil tumbled further into a bear market.
Sasol, the world’s biggest coal-to-liquid fuel producer, dropped the most since June 2013 in Johannesburg.
Samsung Electronics, which gets almost a quarter of its sales from Europe, slid to a two-year low in Seoul.
The won depreciated 0.7 percent versus the dollar and the ruble retreated for a fourth day.
The MSCI Emerging Markets Index sank 1.3 percent to 995.58 at 11:48 am in Hong Kong.
The gauge slipped 0.2 percent in the five-day period, headed for a fifth weekly decline.
European Central Bank President Mario Draghi said yesterday in Washington there are signs the region’s recovery is losing momentum.
The International Monetary Fund cut its outlook for global economic expansion this week.
“For European emerging markets, Europe’s growth is extremely important,” Gabriel Sterne, head of global macro investor relations at Oxford Economics in London, said by phone.
“The forecast for 2015 is looking bad for equities, there is structural weakness and the risk is going to be there for a while.”
Benchmark equity gauges in Hong Kong, Russia and South Africa slumped at least 1.5 percent.
The yield on Russia’s 10-year ruble bond rose 12 basis points to 9.83 percent and the rate on similar-maturity Hungarian securities jumped six basis points to 4.32 percent.
Turkey’s two-year note yield increased six basis points to 9.66 percent.
Energy Stocks
All 10 industry groups in the developing-nation measure retreated, led by energy companies.
PetroChina fell to the lowest close since July 9.
China Oilfield Services tumbled 4.1 percent and Lukoil, Russia’s second-largest oil producer, dropped 2.6 percent.
West Texas Intermediate crude slumped as much as 2.5 percent to $83.59 (R927) a barrel in New York.
It closed yesterday more than 20 percent below its June peak, a common definition of a bear market.
Copper led industrial metals lower in London.
The ruble depreciated 0.5 percent, extending its slump in the past three months to 16 percent, the worst performance among currencies tracked by Bloomberg worldwide.
The central bank has spent more than $3 billion to slow the currency’s selloff amid a dollar shortage and slump in oil prices.
US and European sanctions have made it harder for companies to refinance the nearly $55 billion of debt the central bank estimates is due through December.
War-Battered Economy
Ukraine’s 2017 Eurobond fell for a third day, sending the yield 122 basis points higher to 15.57 percent.
Christine Lagarde, IMF managing director, said yesterday in Washington that more international financing will be needed to prop up the country’s war-battered economy.
The Borsa Istanbul 100 Index dropped 1.1 percent, leaving it little changed in a shortened, three-day week.
The lira slid 0.4 percent.
Turkey’s main city in the country’s southeast has been under curfew for two nights, while violence flared in the region amid Kurdish protests what they say is the government’s failure to help Kobani, a largely Kurdish town just across the border in Syria that’s under siege by Islamic State militants.
The MSCI gauge for developing markets has fallen 0.7 percent this year and trades at 10.7 times 12-month estimated earnings, data compiled by Bloomberg show.
The MSCI World Index has lost 1.2 percent and is valued at a multiple of 14.3.
Volatility Jumps
The Standard & Poor’s 500 Index fell 2.1 percent yesterday, the most since April 10.
The Chicago Board Options Exchange Volatility Index surged as much as 28 percent to the highest level since February.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong decreased 1.7 percent, erasing this week’s advance.
Pro-democracy protest leaders called on supporters to flood the city’s streets today after the government called off talks aimed at ending a two-week standoff.
Computer-maker Lenovo Group Ltd. dropped 5.1 percent in Hong Kong, its steepest decline since February 4.
Samsung Electronics sank 2.2 percent, the biggest drag on the emerging- markets gauge.
South Korea’s Kospi index retreated 1.2 percent to its lowest close since May 7.
Infosys, India’s second-largest software exporter, jumped 6.5 percent to a record.
The company said it will issue free stock to shareholders after posting quarterly profit that topped analyst estimates.
The S&P BSE Sensex fell 1.3 percent before the release of industrial production data today.
CIMB Group Holdings Bhd. tumbled 4.6 percent in Kuala Lumpur to a four-year low, dragging Malaysia’s equity gauge down 1.1 percent.
The country’s second-biggest lender and RHB Capital Bhd. agreed to a three-way merger valued at 72.5 billion ringgit ($22.3 billion) that creates the nation’s largest bank by assets. - Bloomberg News