More specifically, China-related concerns weigh heavily on these markets, given their economies’ dependency on the Middle Kingdom.
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MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS slid to a two-year low and was last down 0.3 percent.
Japan’s Nikkei fell 0.9 percent.
On Monday August 17, the Turkish lira, Mexican peso and South African rand all hit new lows against the dollar, while the South East Asian leaders Malaysia and Indonesia saw their currencies decline to the lowest price levels since the 1998 Asian Financial Crisis.
Investors are still fretting over the health of the world’s second largest economy as mainland China shares went on a wild ride, tumbling more than 5 percent before soaring again to close higher after state-backed buyers rushed into the market.
Ripples were also felt in other emerging currencies following China’s surprise move to weaken the yuan last week.
Futures on the Standard & Poor’s 500 Index added 0.1 percent.
U.S. crude oil fell 0.6 percent to $40.55 a barrel after a fall of more than 4 percent on Wednesday, barely holding above its 6 1/2-year low of $40.40.
– Wellington fell 0.15 percent, or 8.83 points, to 5,742.45.
MSCI’s emerging market index set a new four-year low, having fallen 22 percent from this year’s high hit in April and coming within a stone’s throw of its October 2011 trough.
Brazil, Chile, India, Qatar, China and Thailand are among the vast range of emerging market countries. Bear in mind the words of Rajiv Jain, chief investment officer at Vontobel Asset Managementand Morningstar’s 2012 international-stock fund manager of the year, who recently told Swiss daily Le Temps: “With regard to geography, individual investors ought to avoid investing in emerging markets, which asset class is unsuitable for them”.
“The collapse in emerging market imports reflects a more fundamental drop in demand as capital outflows have forced domestic demand to shrink and lower commodity prices have eroded incomes in commodity-producing countries”, said Neil Shearing of Capital Economics.
The Kazakh tenge plunged to 257 per dollar from around 197 after the central bank scrapped its trading band in another sign of the “currency wars” spreading across emerging markets.
Minutes from last month’s Fed monetary policy meeting showed officials in broad agreement widely agreed that the economy was nearing the point where interest rates should move higher.
But they also noted lagging inflation and a weak global economy posed too big a risk to commit to “lift off”, leading some investors to question the likelihood of a rate hike in September. Australian bonds tracked Treasuries higher.
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The dollar had tumbled as the Fed dampened expectations for a rate rise in September and outlined its fears about the global economy, sending oil prices to fresh lows. Gold also gained, rising to a one-month high of $1,135.40 per ounce.
