Aug. 17 (Bloomberg) -- Emerging-market borrowing costs jumped to the highest this month, led by Russia and Turkey, after disappointing data from the world’s biggest economies spurred concern that the global economic recovery may falter.

The extra yield investors demand to own developing-nation bonds instead of U.S. Treasuries rose for a sixth day, the longest streak since November, adding 10 basis points to 3.83 percentage points as of 5:01 p.m. New York time, according to JPMorgan Chase & Co.’s EMBI+ Index. Russian bonds dropped, pushing yields 19 basis points wider relative to U.S. notes to a four-week high of 4 percentage points as crude fell. Turkey’s bond yields rose 17 basis points to 3.24 percentage points, a five-week high. A basis point is 0.01 percentage point.

Investor concerns are “growing that China may have peaked and is facing a tougher environment over the next few months,” Chris Weafer, chief strategist with Moscow-based UralSib Financial Corp., wrote in a note today. A “disappointing” U.S. confidence report raises concerns about what will drive growth in the world’s largest economy and “undermines the rationale for current high valuations in equities,” he said.

Foreign direct investment in China, Brazil’s biggest trading partner, fell for a 10th straight month in July as companies stalled expansion plans amid the global financial crisis. Investment declined 35.7 percent from a year earlier to $5.36 billion, the Commerce Ministry said at a briefing in Beijing today. That compared with a 6.76 percent drop in June.

Japan, U.S.

Japan’s gross domestic product expanded at an annual 3.7 percent pace in the three months to June 30 following an 11.7 percent decline in the first three months of the year, the Cabinet Office said today in Tokyo. The median estimate of 22 analysts surveyed by Bloomberg News was for 3.9 percent growth.

In the U.S., the Reuters/University of Michigan preliminary index of U.S. consumer sentiment fell to 63.2 from 66 the month before, according to data posted Aug. 14. Economists had forecast an increase to 69, according to the average estimate in a Bloomberg News survey.

Crude oil slumped as much as 3.4 percent to a two-week low of $65.23 a barrel in New York, copper dropped from a 10-month high and aluminum, lead, zinc and nickel also declined, dimming the outlook for emerging-markets sustained by commodity exports.

The MSCI Emerging Markets Index fell 3.9 percent to 819.83, its lowest level in more than two weeks. The drop was the steepest since March 30.

China Stocks

China’s Shanghai Composite Index slid 5.8 percent in the biggest retreat in nine months, leading declines in world equity gauges, and Kazakhstan’s eight-stock KASE index decreased 5.1 percent. Benchmark indexes in Romania, South Africa, Estonia, Egypt, Thailand and the Czech Republic slid at least 3 percent.

The Micex index of stocks in Russia, the world’s biggest energy-exporting economy, lost the most in a month, declining 3.5 percent. OAO RusHydro, Russia’s biggest hydropower utility, dropped as much as 8.3 percent before being suspended in Moscow trading after at least eight people died during an accident at a plant in Siberia.

In Latin America, Brazilian stocks dropped the most in eight weeks, led by commodity producers Vale SA, the world’s biggest iron ore miner, and Gerdau SA, the region’s biggest steel producer. The Bovespa index fell 2.5 percent. Vale slipped 4.2 percent. Gerdau dropped 4.5 percent.

Mexico’s Bolsa sank 2 percent, while Peru’s Lima’s General index slid 1.8 percent.

To contact the reporters on this story: Laura Cochrane in London at lcochrane3@bloomberg.net; Fabio Alves in New York at falves3@bloomberg.net

Last Updated: August 17, 2009 17:35 EDT