LONDON: Emerging market stocks and currencies buckled under the weight of a stronger dollar and falling commodity prices on Monday, though there was a lift for Argentinean assets after an election win for the pro-business candidate Mauricio Macri.
Russia's rouble dropped 2.2 percent as oil prices fell over 2 percent and the South African rand snapped a five-day winning streak after copper and nickel tumbled to multi-year lows.
One of the few winners were Argentina's sovereign bonds as they rose across the board after the Conservative challenger Macri toppled the ruling Peronist movement in the weekend's presidential poll run-off, with a promise to open up the ailing economy to investors.
The Frankfurt-listed American Depository Receipt of Argentinean banking conglomerate Grupo Financiero Galicia jumped 6.28 percent to a record high, and Credit Suisse analysts said the win would likely be interpreted as a positive.
They said they remained "cautiously optimistic" about his ability to push through reforms in the country.
Elsewhere, emerging markets remained under marked pressure.
MSCI's benchmark emerging equity index slipped 0.4 percent, hurt by declines of around half a percent in Hong Kong and mainland China and a 1.4 percent sell-off in Russian dollar-listed shares.
Market consensus is building that the U.S. Federal Reserve will raise rates U.S. interest rates in December, a move which is strengthening the dollar against most currencies and providing further headwinds for emerging market assets.
"The market is waiting for the Fed's first move," said Cristian Maggio, head of emerging markets strategy at TD Securities. "We need to see that move before the market can take a direction - we should expect a lot of volatility between now and then."
He added that market liquidity tends to reduce towards the end of the year, which is also likely to exacerbate moves.
The Chinese yuan touched a near three-month low, adding to pressure on other Asian currencies, after the central bank set its daily guidance rate weaker. S&P affirmed its China sovereign rating at AA-.
The Israeli shekel was also trading 0.22 percent lower ahead of an interest rate decision later where the central bank is expected to keep rates unchanged for the ninth straight month.
Hungarian stocks retreated 0.32 percent and the forint slipped slightly against the euro after Fitch opted not to upgrade Hungary's rating to investment grade late on Friday, despite hopes in the market.
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