The rout in emerging-market assets deepened as stocks sank to the lowest level since 2009 and Kazakhstan abandoned its currency peg.
The tenge plunged by a record and the South African rand slid, briefly breaching 13 per dollar for the first time since December 2001. Russia’s ruble posted the longest losing streak since December. The Shanghai Composite Index fell to a two-week low as PetroChina Co. led energy companies lower. Exchange-traded funds tracking stocks from China to Indonesia declined in U.S. trading.
The MSCI Emerging Markets Index lost 1.2 percent to 830.28 in New York, the lowest close since August 2009. Kazakhstan became the latest developing nation to abandon efforts to prop up its currency after China devalued the yuan. Concern over falling oil prices and slowing growth dragged most currencies down on Thursday even as traders cut bets on a Federal Reserve rate increase next month.
“It’s a vicious cycle,” Nicholas Spiro, the managing director of London-based Spiro Sovereign Strategy, said by e-mail from London. “All these factors -- China, commodities, the Fed and home-grown vulnerabilities -- are all feeding on each other. The currencies under the most strain right now are those ticking most of these boxes.”
Kazakhstan, which joined Vietnam in cutting the value of its currency on Wednesday, moved to a free-floating exchange rate from Thursday, Prime Minister Karim Massimov told a government meeting in Astana.
Turkish stocks slid to a 10-month low and the lira gained 0.3 percent after falling to a record low. The currency has weakened 20 percent this year, making it year’s third-worst emerging-market currency following inconclusive elections in June and militant violence that reached the capital Istanbul Wednesday.
All 10 industry groups in the MSCI gauge fell, led by energy and industrial companies. PetroChina and Cnooc Ltd. sank more than 3 percent in Hong Kong. Dubai’s shares dropped the most since March. The iShares MSCI Indonesia ETF lost 1.5 percent to $19.80 in New York, the biggest U.S. fund tracking mainland China stocks slumped 2.9 percent.
An unexpected increase in U.S. crude stockpiles and record oil production from Saudi Arabia in June have deepened concern that growing oversupply would continue to impact oil prices as nations tussle over market share.
The ruble slid 2 percent, its sixth day of losses, while the Micex Index rose 1.3 percent, halting a three-day slide. Malaysia’s ringgit decreased 0.5 percent to the lowest since August 1998.
The Hang Seng China Enterprises Index declined 2.3 percent to a nine-month low. The Shanghai Composite slid 3.4 percent as concern a slowing economy and weaker currency will spur capital outflows outweighed prospects for more state support.
Philippine shares entered a correction and Indonesian equities were on the cusp of a bear market.