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EMERGING MARKETS-Emerging stocks hit 17-month lows after Wall St sell-off

Stock MarketsOct 11, 2018 11:20
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© Reuters. EMERGING MARKETS-Emerging stocks hit 17-month lows after Wall St sell-off

* Chinese equity benchmark ends at near four-year lows

* S&P 500 ends Wednesday 3.3 pct lower, hitting risk appetite

By Aaron Saldanha and Sruthi Shankar

Oct 11 (Reuters) - Emerging market stocks joined a slide in global equities on Thursday, falling to 17-months lows as worries about growth and the future of a long-running U.S. market rally undermined investors' appetite for risk.

Equities in China .SSEC , whose economic and trade prospects have been at the heart of worries this year over the outlook for global growth sank to near-four year lows. .SS

MSCI's index of emerging market stocks .MSCIEF fell about 3 percent, with the fall in Chinese stocks accompanied by sharp losses in Taiwan .TWII and South Korea .KS11 .

"What we're looking at is a knee-jerk reaction to an unexplained large fall in U.S. equities," said Koon Chow, EM Macro and FX strategist, at UBP.

The S&P 500 and the Dow Jones Industrial Average .DJI saw their biggest daily declines since Feb. 8 on Wednesday, with rises in U.S. bond yields, worries over rising interest rates and comments by U.S. President Donald Trump on rates all feeding nerves.

Volatility in U.S. stocks spiked to six-month highs, but Chow said he still believed the sell-off, as on several previous occasions over the past 18 months, would be short lived and would make for a better buying opportunity in emerging markets.

"The U.S. economy is in a strong shape, so the source of the contagion does not look worrisome," he said.

Central European stock indices also dipped, with Budapest .BUX and Bucharest .BETI trading more than 1 percent lower.

However, MSCI's index of emerging market currencies .MIEM00000CUS were steady against a weaker dollar, with Turkey's lira firming. TRY=

Data showing Turkey's current account deficit in August reversed to a surplus of $2.592 billion, from a $1.778 billion current account deficit in July, offered some sign that this year's nearly 37 percent slide in the currency may be setting the economy straight. rupee INR= weakened 0.2 percent to resume its slide, after snapping a five session losing run on Wednesday. It is down about 14 percent this year, with rises in the global prices of oil LCOc1, India's biggest import, exacting a heavy toll.

EMERGING MARKETS-Emerging stocks hit 17-month lows after Wall St sell-off
 

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