LONDON: Emerging equities fell for a fourth straight day on Tuesday, touching fresh one-month lows as investors priced in the likelihood of a US interest rate rise in December, but currencies firmed slightly.
MSCI's benchmark index slipped 1.2 percent, with the Hong Kong and Seoul bourses amongst the biggest losers in Asia, both down over 1.4 percent.
Korea closed at its lowest level since Oct. 7.
Investors have been trimming holdings in emerging markets assets after a strong US jobs report on Friday strengthened the chance that the US Federal Reserve would raise interest rates next month for the first time since 2006.
The weak growth outlook for emerging markets and a stream of discouraging data are also souring sentiment. "It's not like the Fed rate hike is happening in isolation," said Manik Narain, an emerging markets strategist at UBS.
"There are very few signs of a strong rebound coming through in emerging markets and that is keeping EM assets quite susceptible to changes in US Fed policy."
Mainland Chinese stocks retreated after China's October inflation data showed persisting deflationary pressures.
This followed disappointing trade data out of China at the weekend.
Narain said Chinese fiscal stimulus had been ramped up over the last quarter and the central bank had cut rates quite aggressively so the market was hoping for signs of improvement in Wednesday's data.
Currencies fared a little better, however, as the dollar retreated from the seven-month high reached after Friday's data.
The Russian rouble and Turkish lira firmed modestly against the dollar.
But the South African rand rand remained under pressure after hitting a record low on Monday.
Shares in the stricken MTN Group, reeling from a $5.2 billion Nigerian fine, fell another 3 percent, dragging down the broader index by 1.6 percent.
The Zambian kwacha was also down 4 percent against the dollar to a new record low as copper prices edged towards a six-year low on concerns over flagging demand in China.
In central Europe, the Croatian kuna weakened 0.3 percent against the euro to a one-week low after the weekend's inconclusive elections.
"We expect political uncertainty to persist in the near term, either manifested in a fragile minority government or re-elections," Deanie Haugaard, EM economist at ING, said in a note.
Hungary's forint was little changed against the euro after data showed headline consumer prices had edged 0.1 percent higher year-on-year in October.
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