Emerging stocks hit two-week lows on Wednesday as weak German data ignited worries about the global economy, though the Romanian leu reached a one-year high after news the country's local debt is to be included in a flagship index.

Emerging assets came under pressure as German fourth quarter GDP data this week showed a 0.5 percent drop, and the German government cut its 2013 growth forecast on Wednesday.

The MSCI emerging index fell half a percent, moving away from recent 9-month highs. Chinese stocks dropped from the previous day's 7-1/2 month highs, as real estate developers fell on renewed fears of broader property taxes.

Turkish stocks continued on their strong run, however, hitting record highs for a seventh straight day on Turkey's healthy growth prospects.

The Romanian leu rose more than 1 percent to a one-year high against the euro and Romanian 10-year local bond yields fell below 6 percent to multi-year lows, after news JP Morgan is to include Romania in its local debt index from March 1.

Barclays is also due to include Romania in its local debt index. Inclusion in benchmark indices typically attracts a greater pool of investors.

SocGen analysts said in a client note they expected Romanian bond yields to fall further as a result of the index inclusion, and added that:

“The anticipated inflows into the bond market will also be supportive for the leu.”

The rand dropped more than 1.5 percent to a six-week low against the dollar due to brewing labour unrest in the platinum sector. South Africa's manufacturing PMI contracted for a fourth successive month in December, to 47.4.

The Egyptian pound tested record lows on ongoing worries about the country's level of foreign exchange reserves. - Reuters