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Brexit Sparks Emerging-Market Selloff as Polish Assets Worst Hit

  • Zloty, rand lead losses among currencies as volatility rises
  • Credit-default swaps surge as investors rush to buy protection
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El-Erian: Europe's 'Plan B' Is Critical to Markets

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Eastern Europe and South Africa led a selloff in developing-nation assets following Britain’s vote to leave the European Union as investors speculated that their economies will be the worst affected by the fallout from Thursday’s referendum.

Historical 100-day volatility in a gauge of currencies surged to the highest since March 2012. Poland’s zloty tumbled to the lowest closing level against the euro since January. The rand ended a five-day gain. Benchmark stock indexes in Warsaw, Prague and Istanbul all retreated at least 3 percent. The premium investors demand to hold emerging-market sovereign debt rather than U.S. Treasuries increased the most since June 2013. The cost of hedging against a default by Hungary jumped to a 17-month high.