Emerging stocks,bonds and currencies took another hammering on Wednesday as mounting expectations of Western action against Syria pushed up oil prices and drove investors to seek shelter in dollar assets.
The Turkish lira and the Indian rupee already under heavy pressure due to their large current account deficits and an imminent rollback in U.S. money printing - were at the forefront of selling, with both hitting new record lows as oil prices surged to six-month highs above $117 a barrel.
The higher cost of oil and the depreciation of their currencies, will make it even more difficult for the two energy importers to contain their current account gaps.
The Syrian crisis has aggravated a selloff in emerging market assets that was triggered by expectations the U.S. Federal Reserve will start scaling back its massive stimulus program, as soon as next month.
The Turkish lira and the Indian rupee already under heavy pressure due to their large current account deficits and an imminent rollback in U.S. money printing - were at the forefront of selling, with both hitting new record lows as oil prices surged to six-month highs above $117 a barrel.
The higher cost of oil and the depreciation of their currencies, will make it even more difficult for the two energy importers to contain their current account gaps.
The Syrian crisis has aggravated a selloff in emerging market assets that was triggered by expectations the U.S. Federal Reserve will start scaling back its massive stimulus program, as soon as next month.
Losses on emerging currencies come as investors stampede to exit emerging stocks and bonds, raising concerns of a vicious circle that will induce more and more investors to sell out.
Dubai's stockmarket dived 7.5 percent at one point, after a 7 percent slide on Tuesday, although it later recovered.
Stocks in the Philippines tumbled as much as 6 percent, while Indonesian and Thai bourses fell 2.5-3 percent as Asian currencies suffered fierce selling, with the Indonesian rupiah touching a new four-year low.
Foreign investors sold $1 billion of Indian shares in the eight sessions through Tuesday while dumping almost $3 billion in debt over 13 successive sessions. Indonesia has seen equity outflows of $1.3 billion in the past seven sessions.
