Emerging market stocks dip on global growth fears, FX weakens
* IMF cut to global growth forecast weighs on emerging
* Russian rouble, stocks slip amid weak oil prices
* Turkish lira drops 0.4 percent
* Romanian leu not far from all time low against euro
By Aaron Saldanha
Jan 22 (Reuters) - Emerging market stocks and currencies
slid on Tuesday, as fears of slowing global growth left
investors queuing up to exit developing world markets and move
into safer assets which reflected their downbeat risk appetite.
The International Monetary Fund trimmed its global growth
forecasts on Monday as trade tensions and uncertainty loomed, a
warning which came shortly after China reported its slowest
growth in 28 years for 2018. Weak risk sentiment among investors
on Tuesday propped the dollar to hold at a near three-week high.
Gareth Leather, a senior economist with Capital Economics,
said a slowdown in emerging markets would be concentrated in
export-oriented Asia, where the impact of tepid global growth
would be seen most clearly.
MSCI's index of developing world stocks was 0.7
percent lower, retreating from a more than 15-1/2 week high
notched on Monday, as weakness in index heavyweights China
and South Korea prevailed.
Chinese blue-chip stocks fell 1.3 percent, their
steepest decline in more than a month and a half, buffeted by
worries about the implications of slowing demand will have for
the world's manufacturing powerhouse.
Worries about slower growth in the world's second-largest
economy, combined with the greenback's strength, sent the
onshore Chinese yuan to a near two-week low as it
breached the closely watched 6.8 yuan per dollar mark.
Russia's rouble and local stocks each
weakened about 0.2 percent, pressured by a 1.3 percent drop in
the price of oil, a key export for the world's largest
Emerging Europe was another area of weakness among
developing world markets, Capital Economics' Leather said, with
Turkey "probably going to experience a deep recession this
Turkey's lira softened 0.4 percent to give back all
gains made since Thursday.
Commodity giant South Africa's rand shed 0.7 percent
while South African equities fell 0.3 percent.
Retailer Shoprite Holdings Ltd led losses on the
stocks index, down 2.9 percent, after reporting anaemic growth
in the half year to December 2018.
Ratings agency Moody's downgraded Lebanon's sovereign rating
to Caa1, adding that the government's debt rescheduling could
constitute a default under the rating firm's definition.
In Europe, Romania's leu weakened a touch against the euro
and was anchored not far from an all-time low logged
against the common currency on Monday. The country's main stocks
index dipped 0.4 percent.
Romanian assets have underperformed Central European peers
since the government last month announced new levies on the
banking and energy sectors.
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(Reporting by Aaron Saldanha, Additional reporting by Agamoni
Ghosh in Bengaluru, editing by Louise Heavens)
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