The selloff in emerging-market assets and commodities deepened, spurring declines in currencies from Russia?s ruble to Australia?s dollar and sending a measure of developing-nation stocks to a four-year low. The pound strengthened after U.K. inflation unexpectedly quickened.
Oil and copper led commodities lower speculation the global fuel glut will persist and China?s economy will face further headwinds. Shares in Shanghai dropped the most in three weeks, while prospects for the Federal Reserve to raise interest rates also sapped demand for riskier assets. Thailand?s baht fell to a six-year low after yesterday?s deadly bomb explosion in the capital.
?There is a lack of positive catalysts for emerging markets,? Martial Godet, the head of emerging-market equities and derivatives strategy at BNP Paribas SA in Paris, said by e-mail. ?Dovish Fed comments and a rate hike in December rather than September could help stabilize the situation, especially on the currency side.?
The MSCI Emerging Markets Index dropped 0.7 percent at 6:33 a.m. in New York. Russia?s ruble weakened for a fourth day and the Aussie retreated the most among its 16 major peers. The pound climbed 0.7 percent to $1.5701 and gilts fell. Futures signaled U.S. stocks will fall for the first time in three days. Treasuries were little changed, with the yield on 10-year notes at 2.16 percent.
Chinese stocks tumbled, with the Shanghai Composite Index losing 6.2 percent, the most in three weeks, as traders reduced stimulus bets and speculated the government will pare back efforts to prop up equities after data showed home prices rose. The Hang Seng China Enterprises Index dropped 1.5 percent, erasing a gain of as much as 1.3 percent.
Read more at BLOOMBERG