EMERGING MARKETS-Emerging assets hit new multi-year lows on China contagion

lunes 24 de agosto de 2015 15:13 GYT
 

(Adds Latin American markets, Sao Paulo dateline)

By Sujata Rao and Walter Brandimarte

LONDON/SAO PAULO Aug 24 (Reuters) - Contagion from China's equity malaise spread across emerging markets on Monday, driving currencies to multi-year lows against the dollar while a benchmark equity index slumped more than 5 percent.

Concern over the world's No. 2 economy pushed Chinese mainland stocks into their biggest one-day fall since February 2007. They lost more than 8 percent and are now in the red for 2015 .

Selling escalated across emerging markets, taking MSCI's benchmark equity index to six-year lows in its biggest one-day loss since September 2011.

Regulators' futile efforts to stem the equity rout have raised doubts about Beijing's ability to deal with the crisis. Meanwhile investors fled markets such as Philippines and India, which have been relatively resilient.

"This 2015 emerging market crisis has the potential to become worse than the Asian currency crisis of 1997/98 as it is impacting global equity markets across the globe," said Bernd Berg, a strategist at Societe Generale.

Describing the day as a black Monday for Latin American currencies, Berg advised clients to short the currencies of Chile, Brazil, and Mexico.

Brazilian stocks and currency against the dollar fell to six-year and 12-year lows, respectively. Mexico's peso slumped to an all-time low while the country's IPC stock index fell to its lowest since March 2014.   Continuación...