Emerging Markets Hit Two Month Lows

“Emerging-market stocks sank to a two-month low, currencies weakened and borrowing costs rose as Italy’s inconclusive election revived European debt concerns and investors speculatedChina will announce new property curbs.

OTP Bank Nyrt. (OTP), Hungary’s biggest lender, headed for the biggest loss since Oct. 18 as the benchmark BUX Index led declines among major emerging markets. OAO Mosenergo, a Russian power company, dropped to a six-week low after RIA Novosti reported PresidentVladimir Putin ordered a cap on increases in household utility bills. Evergrande Real Estate Group Ltd. (3333) slid to the lowest level in three months in Hong Kong. Russia’s ruble and theIndian rupee weakened at least 0.2 percent per dollar, while Poland’s zloty sank 0.4 percent versus the euro.

The MSCI Emerging Markets Index (MXEF) retreated 1.1 percent to 1,042.99 as of 12:25 p.m. inLondon, poised for its lowest close since Dec. 17. Early results suggested Italy’s election would lead to a hung parliament and another vote. The 21 countries in the developing-nations gauge send about 26 percent to the European Union on average, data compiled by the World Trade Organization show.

“Emerging markets in Europe have been hit by renewed worries about the euro zone,” Gaelle Blanchard, an emerging-market strategist at Societe Generale SA in London, said by e-mail. “The zloty is the highest beta in the region. It’s generally the proxy for eastern Europe.”

Hungary’s BUX Index sank 2.1 percent to the lowest level since Dec. 28, and the forint weakened 0.2 percent against the euro. Hungary’s central bank will probably cut the benchmarkinterest rate for a seventh month to a record low today as policy makers look to fight a recession at President Andras Simor’s final policy meeting, according to a Bloomberg survey of 26 analysts….”

Full article