LONDON: Emerging market stocks extended their four-day losing streak on Tuesday as bourses and currencies came under pressure from weak China trade data and the fall-out of Monday's oil price rout, with South Africa's rand hitting a new record low.
MSCI's broadest emerging market index slid 1.3 percent to the lowest in just over two months.
Bourses in mainland China , Russia and Gulf countries chalked up some of the steepest losses. China's yuan closed at its weakest against the dollar in more than 4 years and currencies elsewhere traded flat to weaker.
A steeper-than-expected 6.8 percent drop in November in Chinese exports cast doubt on hopes the world's second-largest economy would level off in the fourth quarter, spelling more pain for its trading partners.
This frayed investors' nerves further after oil prices dropped 6 percent on Monday to their lowest in 7 years in the wake of an acrimonious OPEC meeting on Friday at which the fractious cartel failed to agree a new production ceiling.
"All of this is just a reminder of the weaker China macro story, which is passing through into the global backdrop as we have seen with the drop in oil prices, as no one is prepared to cut supply," said Simon Quijano-Evans, chief emerging markets strategist at Commerzbank.
"We are seeing this global deflation story continuing to be priced in to all sorts of asset classes - that is the principal story that will be on markets' minds in the next 3-6 months."
Mainland Chinese equities ended the session almost 2 percent lower, while Russian rouble stocks slipped 1 percent and South Africa's bourse matching those falls.
The oil price plunge hammered Gulf markets. Qatar's main index dropped more than 3 percent after hitting a two-year low earlier in the session, while Saudi Arabia and Dubai stocks lost more than 2 percent, the latter one trading at a one-year low.
Many currencies were already under pressure from deteriorating commodity prices and bracing for higher US interest rates, and they felt the heat again on Tuesday.
South Africa's rand hit a fresh record low against the dollar after its current account deficit widened sharply in the third quarter of this year, due to imports rising more strongly than exports and investment in local bonds and stocks tapering off sharply.
Russia's rouble nudged 0.2 percent lower against the greenback while Turkey's lira traded flat as Prime Minister Ahmet Davutoglu said he saw industrial output growth continuing and contributing to economic growth in the fourth quarter.
Across central and eastern Europe, currencies also slipped against the euro, with the Czech crown, Polish zloty and Hungarian forint all weakening around 0.2 percent against the euro.
Stock markets across the region painted a more mixed picture, with bourses in Prague and Warsaw extending their losing streaks, down 0.5 percent and 1.4 percent respectively.
Meanwhile, Budapest's main index gained 0.2 percent as data showed industrial output topped forecasts to rise an annual 10.1 percent in October thanks to vehicle manufacturing.
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