Emerging Markets Drop in Global Slow Down

Emerging-market stocks fell to a six-month low and currencies tumbled as concern deepened that global growth is slowing. Oil’s drop below $80 a barrel weighed on energy producers.

Hyundai Motor Co. (005380), which gets 46 percent of sales from North America and Europe, sank to a three-year low in Seoul, while Cnooc Ltd. slid to the weakest since April in Hong Kong. Turkey and Hungary led declines in eastern European bonds, and the Bloomberg GCC 200 Index of equities in the world’s biggest oil-exporting region retreated to the lowest level since July. The ruble lost 1.7 percent versus the dollar .

The MSCI Emerging Markets Index declined 1.4 percent to 969.26 at 1:52 p.m. in London. Commodities sank to a five-year low as energy prices extended losses, while concern grew that a financial crisis is returning to the Europe’s so-called peripheral nations. While U.S. jobless claims unexpectedly dropped last week, according to data today, reports yesterday showed a bigger-than-projected drop in retail sales.

“There are renewed fears about the global growth outlook,” Neil Shearing, an economist at Capital Economics Ltd. in London, said by phone. “The euro economy is clearly slowing and it looks to be heading for more problems.

All 10 industry groups in the MSCI Emerging Markets Index fell, led by consumer-discretionary and energy companies. Hyundai Motor, South Korea’s largest automaker, dropped 4 percent. A Bloomberg gauge tracking 20 emerging-market currencies declined 0.6 percent.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza