EMERGING MARKETS-Copper share rout leads emerging markets lower
By Sujata Rao
LONDON Jan 14 (Reuters) - Big copper firms from India's Hindalco to Poland's KGHM led emerging equity falls on Wednesday as prices for the metal plunged to 5-1/2 year lows, fuelling concerns about growth and deflation in many countries.
Copper's rout combined with oil's 60 percent slide in the past six months is weighing on commodity producers from Russia to Chile, while growth fears are pressuring equity markets worldwide. MSCI's emerging equity index fell half a percent while stocks in commodity-heavy South Africa shed 1 percent.
London-listed emerging market miners such as Antofagasta and Kazakhmys fell 10 and 20 percent respectively, while Polish shares were led 0.8 percent lower by copper smelter KGHM's 5 percent fall .
Indian miners Sterlite and Hindalco and also lost over 5 percent, dragging the index lower
Analysts say the sheer scale of the commodity rout is muddying the picture for non-commodity markets too, potentially hitting investment and in many cases exacerbating deflation.
"The only clear repositioning has been away from net commodity exporters towards importers. But...although we're very positive on Turkey you'll have secondary effects from issues such as lower revenues from Middle Eastern countries which in turn hits flows into Turkey," said Simon Quijano-Evans, head of emerging markets research at Commerzbank.
The moves are pressuring many currencies - Chile's peso for instance has already lost 2 percent this year. The copper and oil slide also raises pressure for a fresh devaluation of Kazakhstan's tenge, with forwards pricing it 17 percent weaker over three months.
In Russia, already reeling from crisis, the rouble fell 1 percent to new 3-1/2 month lows, while the pegged Belarus rouble fell 5 percent, its fourth devaluation this month. Continuación...