Emerging market stocks fell for a 12th day in the longest slump since 1990 as concerns deepened that higher US interest rates will curb demand for riskier assets.
China’s stocks fell from a seven-year high, led by industrial and financial companies, after inflation data signalled weaker demand and traders weighed whether the MSCI would add mainland securities to its global indices.
A bright spot in the local market was AngloGold Ashanti, the third-largest gold producer, which rallied in Johannesburg after the sale of its Cripple Creek & Victor mine to Newmont Mining ended speculation that it would have to issue shares.
The blue chip JSE Top40 index dropped 1.19 percent 45 395.91 points and the broader all share index was down 1.05 percent to 51 080.26.
At the same time, a rout in German equities sent European stocks down for a sixth day. The Stoxx Europe 600 index fell 0.4 percent to 383.87 points at the close of trading in London, earlier losing as much as 1.4 percent.
Germany’s DAX index declined 0.6 percent after entering a correction on Monday. It has dropped 11 percent from its April peak.
Greece
Stocks have fallen in past days as Greece struggles to strike a debt deal after months of talks.
Creditors are growing increasingly frustrated with the country’s government after it rejected the terms of an aid package again last week and deferred a payment due to the International Monetary Fund. Greece pulled back on budget concessions to its creditors in new proposals yesterday.
Earlier in the day, Japanese stocks fell for a third day after the yen strengthened by the most in more than two months and as an impasse between Greece and its creditors dragged on.
Returning to emerging markets, financial shares led Czech stocks lower for the third day.
The rouble appreciated for the third day.
Turkish equities rebounded from a three-month low, and Hungary’s forint strengthened for the first time in three days after consumer prices rose.
The MSCI emerging markets index slid 0.5 percent to 972.66 points at 2.38pm in London, taking its loss since May 22 to 6.3 percent.
Stocks have slumped as a string of data signalled that the US economy may be able to withstand its first interest rate increase since 2006.
“There is fear of an early first rate hike by the Federal Reserve as a consequence of stronger US data,” Michael Ganske, the head of emerging markets at Rogge Global Partners in London, said.
The MSCI developing nation measure has risen 1.7 percent this year and trades at 11.8 times 12-month projected earnings, data show.
The MSCI world index has climbed 2.5 percent in 2015 and is valued at a multiple of 16.4.
Seven out of 10 industry groups in MSCI’s emerging markets gauge fell yesterday, led by industrial and technology shares.
Bloomberg