Emerging equities racked up a third day of losses yesterday and Russia’s rouble hit a new 2015 low, reflecting investors’ waning risk appetite with many assets in line for steep annual falls.
MSCI’s broadest emerging market index fell 0.5% to a one-week low, on track for an annual loss of more than 16% in its third year in the red. Many bourses in Asia ended their day on a sour note while in Russia dollar-denominated stocks stumbled 1.5% and their rouble peers lost 0.2%.
Oil prices falling by some two% added to the pressure for Russia’s rouble, which weakened 1.2% against the dollar after hitting a fresh 2015 low, and is on track for a more than 20% decline over the course of the year.
South Africa’s rand weakened 0.7% against the greenback before November trade data forecast to show a narrowing trade deficit after an unexpectedly large one in October sent the currency to what were then record lows.
The rand is on track for an annual decline of 25% in its fifth year of losses, while Turkey’s lira - down 0.2% on the day – looks to end its third year in the red 20% weaker against the dollar.
Bourses in Prague, Budapest and Bucharest all fell at least 0.25% while stocks in Warsaw traded flat.
However, Hungary’s main index looked to be one of the main gainers of the year across emerging markets, up 44% since the start of the year.
Currencies across the region traded flat to slightly lower against the euro on the day, though the Czech crown looked on track for a 2.3% rise on the year and the Polish zloty and the Hungarian forint for annual gains of around 1.1%.
In Ukraine, Finance Minister Natalia Yaresko said the government planned to pursue talks with Russia in January over a $3bn Eurobond, which matured on December 20 and is part of the debt earmarked by Kiev for restructuring to shore up its war-torn economy. Russia has refused to accept these terms and threatened to take Ukraine to court.
Yaresko also said she had doubts the International Monetary Fund would approve all the changes adopted by parliament in the 2016 state budget, a condition to secure the next tranche of financial aid for Kiev.