A man passes before a share prices board in Tokyo on August 19, 2015. Japan's share prices fell 331.84 points to close at 20,222.63 points at the Tokyo Stock Exchange, tracking falls on Wall Street and another plunge on China's main index as weak trade data hinted at the fragility of Japan's recovery.YOSHIKAZU TSUNO/AFP / Getty Images
The selloff in emerging markets spread to Europe, sending stocks lower for the first time this week. U.S. equity-index futures retreated and gold rose.
Exporters led declines as the slowdown in China and losses in developing economies threatens earnings while the outlook for the first U.S. interest-rate increase since 2006 hurt demand for riskier assets. Vietnam and Kazakhstan devalued their currencies as the fallout continued from China's decision last week to allow the yuan to depreciate.
"Investors are getting the ultimate scare with uncertainties over China, weakening currencies, and prospects of a U.S. rate increase," said Jonathan Ravelas, the chief market strategist at Manila-based BDO Unibank Inc. "Investors are repatriating funds and staying out until the dust settles."
The Stoxx Europe 600 Index lost 0.8 per cent by 10:36 a.m. in London and emerging-market shares extended declines to a four-year low. Standard & Poor's 500 Index futures slid 0.2 per cent. Gold rose for a third day, climbing 0.4 per cent to $1,122.47 an ounce. The yield on 10-year Treasury notes fell one basis point to 2.18 per cent.
More than 560 shares in the Stoxx 600 declined, with chemical companies, automakers and commodity producers leading the retreat. S&P 500 E-mini futures expiring in September signaled U.S. stocks will drop for a second day.
While a report on consumer prices and the release of minutes of the Federal Reserve's last meeting in July will provide information about inflation and rate considerations, the data and policy meeting precede China's surprise devaluation on Aug. 11 that prompted some investors to scale back bets on a rate increase in September.
Emerging Markets
The MSCI Emerging Markets Index lost 0.5 per cent, its fourth day of losses. Global funds are poised to be net sellers in developing Asian equities tracked by Bloomberg for a third straight month, the longest run since the middle of 2012.
Malaysia's ringgit and Taiwan's dollar led declines in currencies while exchange rates for commodity producers including Russia and South Africa rebounded.
Kazakhstan allowed the tenge to weaken the most since a devaluation 18 months ago, signaling Central Asia's biggest crude producer wants to adjust to declines in the currencies of China and Russia, its top trading partners. The currency dropped 4.4 per cent to 197 per dollar.
Vietnam devalued the dong for the third time this year, with the central bank weakening its reference rate by 1 per cent. It also increased the scope for fluctuations to 3 per cent on either side, after doubling the range on Aug. 12.
The Shanghai Composite Index erased a drop of as much as 5.1 per cent to close 1.2 per cent higher. The gauge earlier broke below its 200-day moving average, a level that has prompted rebounds on two occasions since the start of July. Hong Kong's Hang Seng China Enterprises Index dropped 1.2 per cent.
Cutting Forecast
Carlsberg A/S tumbled 8 per cent in Europe after the world's fourth-biggest brewer cut its full-year profit forecast after reporting quarterly earnings that misses analysts' estimates. Sydbank A/S lost 6.2 per cent after posting net income that fell short of projections. Glencore Plc slid 3.8 per cent as the miner reported a slump in profit.
Raiffeisen Bank International AG jumped 8.1 per cent as the second-biggest lender in eastern Europe said net income increased, beating projections. Admiral Group Plc advanced 2.7 per cent after the U.K. car insurer reported an increase in first-half profit and increased its dividend..
The euro strengthened 0.1 per cent to $1.1038, snapping a four-day losing streak and the yen was little changed. Asian and commodity-linked currencies have borne the brunt of declines since the yuan was ratcheted lower.