Publications
Partners
Singapore - Emerging-market stocks were set to decline for a fourth week, their longest losing streak since August, and currencies weakened as concern that global growth remains sluggish spurred outflows.
Chinese shares headed for the longest string of weekly losses in two years on speculation the government will refrain form adding fresh stimulus even as the world’s second-largest economy falters.
Chile’s peso, Turkey’s lira, the rand and South Korea’s won led currencies lower as the dollar extended gains on the prospect the Federal Reserve will raise interest rates this year.
An emerging-markets rally that started in January lost momentum as investors pulled $2.9bn from equities in Asia and Brazil this month. Weak data from the US and China fueled concerns that central banks may be unable to sustain a recovery. Malaysia on Friday reported slower economic expansion for a fifth quarter and Chinese data due Saturday are forecast to show industrial output growth moderated in April.
“The ground under the feet of emerging-market assets is looking decidedly shaky,” said Mitul Kotecha, head of Asian foreign-exchange and interest-rate strategy at Barclays Plc in Singapore.
“Perhaps the realization that the rally was not fully justified by fundamentals in the first place has been sufficient to prompt renewed weakness. As positioning appears to have become unsupportive, any negative developments could have a much larger effect now than they would have had a few weeks ago.”
The MSCI Emerging Markets Index fell 0.6% to 802.07 11:49, and is down 0.4% for the week. The Shanghai Composite Index slid 2.6% from May 6, heading for a fourth weekly drop.
MSCI Emerging Markets Currency Index was down 0.2% for the day and the week, after dropping 1.4% in the five days ended May 6. The Bloomberg Dollar Spot Index climbed 0.4% after surging 1.5% last week.
