Nov. 6 (Bloomberg) -- All four major developing-nation equity fund groups posted outflows concurrently for the first time since June on concern the pace of the global economic recovery may not justify valuations, EPFR Global said.

Redemptions from global emerging markets, Asia, Latin America and Europe, the Middle East and Africa stock funds contributed to net outflows of $5.42 billion for all equity vehicles in the week ended Nov. 4, EPFR said in a statement received today. Bond funds took in a net $3.63 billion during the week, it added.

“Worries about tighter credit conditions weighed heavily, with central banks talking about exit strategies from the ultra- easy policies of the past 12 months despite the fact key private institutions are still very publicly repairing their balance sheets,” EPFR said. The Cambridge, Massachusetts-based firm tracks funds with $10 trillion in assets.

Australia’s central bank raised interest rates this week for a second straight month while India and China both took steps last week to tighten lending requirements. The Reserve Bank said in Sydney today that “a further gradual lessening of monetary stimulus is likely to be required over time.”

Emerging-market stocks were among the worst performers in the week ended Nov. 4, with developing-nation benchmark indexes posting the 10 biggest declines among 89 measures tracked by Bloomberg. Russia’s Micex index entered a correction during the period, while Vietnam’s VN Index tumbled 10 percent.

Indexes Gain

The MSCI Emerging Markets Index rose for a third day, adding 0.7 percent to 936.36 as of 5:09 p.m. in New York. The extra yield investors demand to own developing nations’ bonds instead of U.S. Treasuries rose six basis points to 3.21 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index.

The unemployment rate in the U.S. soared to a 26-year high of 10.2 percent in October and employers cut more jobs than forecast. U.S. consumer spending fell 0.5 percent in September, while the Reuters/University of Michigan final index of consumer sentiment decreased in October, raising concern that the U.S. economy, which grew in the third quarter for the first time in more than a year, may falter.

“We will likely see an early-cycle peak of the equity market going into the end of the year because we’re now seeing the peaking of the global industry production growth momentum,” Fan Cheuk Wan, head of Asia-Pacific research at Credit Suisse Private Banking, said in an interview with Bloomberg Television today. “We would regard this as a healthy short-term correction in the equity market.”

Emerging Markets Losses

Developing nation stock funds lost about $1.3 billion during the week, snapping an eight-week winning streak, Morgan Stanley analysts led by Jonathan Garner said in a note dated yesterday, citing EPFR data.

Global emerging-market equity funds lost $539 million in the week, while those investing in Asia developing nations, Latin America and Europe, the Middle East and Africa also saw outflows, EPFR said. Redemptions from China totaled $270 million while India lost $82 million, the highest so far this year.

Among developed nations, U.S. equity funds posted outflows for the fifth time in six weeks, while Europe stock funds recorded losses of $535 million, their worst week since the period ended July 8, EPFR said. Japan funds also saw outflows for the seventh straight week, taking net losses this year to more than $5 billion.

To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Tian Huang in New York at thuang57@bloomberg.net.

Last Updated: November 6, 2009 17:28 EST