London - Emerging stocks edged down on Tuesday but held above 6-1/2-month lows on the prospect of delayed US rate hikes, while shares and currencies in oil exporters fell as oil prices sank to their lowest in nearly four years.
With the dollar recovering after its biggest drop in a year on Monday, currencies were more mixed though the rouble fell another 1 percent against the dollar as oil prices inched below $88 (R976) a barrel, the lowest since December 2010.
MSCI's emerging equity index slipped 0.2 percent, resuming its slide after the previous session's gains.
It was still outperforming overall, however, with European stocks down a full 1 percent and MSCI's 45-country world index 0.4 percent lower.
Emerging markets have been suffering as the US Federal Reserve prepares to end years of aggressive stimulus and is heading for its first post-crisis rate rise.
But there are some signs the rising dollar and its impact on emerging economies may cause the US central bank to go easier on policy tightening.
Most notably, Fed Vice Chairman Stanley Fischer said over the weekend that moves to tighten policy may be hampered by the recent downturn in the global growth outlook.
“There seems to have been some overplaying of (Federal Reserve policymaker) Stanley Fischer's speech from the weekend but nevertheless we have seen it very rapidly priced into markets,” said Peter Attard Montalto an emerging markets economist at Nomura in London.
“With the drop in oil prices there is focus on Turkey and the other big importers, but it hasn't really been reflected in the market pricing because everything is being overridden by the Fed. Monetary policy is still king.”
Chinese stocks sagged on the gloomy global outlook but Thai and Turkish shares - both countries are both big oil importers - gained 0.6 and 0.2 percent respectively as crude prices hit near 4-year lows.
On the flip side, oil exporters in the Middle east and elsewhere stayed under pressure.
Saudi Arabia's stock market dropped another 2.4 percent as it heads for its worst week since early 2011 and other Gulf markets also fell by 1 percent or more.
Nigerian stocks fell 1 percent to the lowest in almost five months while the naira stayed near seven-month lows.
Greek stocks which are now part of most emerging market indexes, fell 4 percent to one-year lows on fears of snap elections in the country, the first euro zone recipient of a bailout by international lenders.
The rouble was also being squeezed lower, falling 1 percent, while the central bank said it had shifted the boundaries of the currency's trading band by another 10 kopecks.
The currency is down almost 20 percent this year.
“The focus of investors' attention is the price of oil and the prospects for a further fall, which is priced into present prices (of the rouble),” Anton Tokmakov, head of conversion operations at Moscow-based Absolut Bank, told clients.
Russian stocks however rose slightly, thanks to relative calm on the Ukraine front which is raising hopes of no further Western sanctions on Moscow.
In contrast, Brazilian stocks had surged a whopping 4.8 percent on Monday and the real saw its biggest gain against the dollar since June overnight after polls showed economy-focused Aecio Neves had pulled ahead of incumbent Dilma Rousseff in the presidential election race. - Reuters