EMERGING MARKETS-Bears maul currencies, stocks hit 6-1/2 year lows

miércoles 20 de enero de 2016 07:39 GYT
 

By Marc Jones

LONDON Jan 20 (Reuters) - Emerging markets were at the centre of another global rout on Wednesday, with shares tumbling to 6-1/2 year lows and a number of major currencies, including Russia's rouble, teetering near all-time troughs.

MSCI's 23-country EM share index plunged more than 2.6 percent as the latest dive in oil prices spooked markets again and took the index's drop since the start of the year past 12 percent.

The bears spared no-one. Russia, which earns much of its revenues from oil, saw the rouble slide beyond 80 to the dollar and the South African rand, Mexican peso, Korean won and Turkish lira all fell sharply against the U.S. currency.

"The pressure on emerging markets is here to stay," said Aroop Chatterjee, a director of research at Barclays in London.

He said the dollar's strength was no longer about bets on higher U.S. interest rates but rather the protection it offers in times of turbulence.

"This is a very different kind of dollar rally and in this new world it is emerging markets that bear the brunt," he said.

The premium investors demand to hold emerging market government bonds rather than ultra-safe U.S. treasuries also widened again as their toughest start to a year since the height of the global financial crisis continued.

The Institute of International Finance, an authoritative source of data on investment flows, delivered more gloomy news too. It said it expected investors to pull another $450 billion of capital out of EM this year, having yanked $735 last year.   Continuación...