London - Emerging equities slipped to fresh five-week lows on Monday and currencies mostly retreated against the dollar as investors dumped riskier assets, fearing the impact of the attacks in Paris.
MSCI's benchmark emerging market stock index fell almost 1 percent to its lowest level since October 5, weighed down by losses of around 1.7 percent in Hong Kong and 1.5 percent in South Korea.
“We have seen a bit of risk-off. Gold and the dollar have rallied and EM is under a moderate amount of pressure,” said Aroop Chatterjee, a director of EM research at Barclays.
Asian currencies were mostly weaker, with South Korea's won hitting a six-week low and Indonesia's rupiah at its weakest in nearly four weeks. Indonesia posted a trade surplus in October for the 11th month running, but this was mainly due to low imports.
That comes on the heels of data showing Taiwan and Singapore narrowly escaping recession and Malaysian growth at two-year lows, while Japan slipped back into recession, rekindling fears for the global economy.
“The economic data has not followed through from the recent improvements,” said Chatterjee. “The trade numbers out of Asia have not been great. These suggest a still weak external demand picture for EMs.”
The Turkish lira lost 0.5 percent against the dollar and Turkish stocks slipped 0.95 percent. On Sunday President Tayyip Erdogan renewed his call for lower interest rates, an argument likely to unnerve investors already worried about central bank independence.
Turkish unemployment rose to 10.1 percent in the July-September period but October's budget surplus stood at 7.2 billion, reflecting higher-than-expected revenue and more control over spending, the finance minister said.
Rouble firms, rand flat
Russia's rouble strengthened almost 1 percent against the dollar and stocks firmed 0.72 percent.
Speaking at the G20 summit, Russian Finance Minister Anton Siluanov said Moscow hoped to reach a compromise with Ukraine over Kiev's debt.
The South African rand was flat against the dollar, hovering near a record low hit in the previous session.
But South African stocks rose 0.6 percent after mobile company MTN Group said Nigeria had pushed back a Monday deadline for it to pay a $5.2 billion fine until talks with authorities have concluded.
In the Middle East, Dubai's main index bounced 1.3 percent after falling 3.6 percent on Sunday to its lowest level since December 2014 in the wake of the Paris attacks. But Egypt, more reliant on tourism, fell another 0.7 percent, hitting new 23-month lows.
Saudi Arabia's bourse was flat after tumbling to a 35-month low on Sunday.
In Ghana, the central bank is expected to keep interest rates on hold at 25 percent as the cedi has stabilised following a 100 basis point rate rise earlier this year.
“Inflation seems to have more or less peaked and should start to fall back, and the government has announced sizeable plans for fiscal consolidation,” said William Jackson at Capital Economics.
The Polish zloty and the Hungarian forint weakened modestly against the euro, with expectations growing that the ECB will resort to further monetary easing to lift the euro economy.
REUTERS