MSCI index of emerging market stocks fall 0.9 per cent, Turkish lira 0.8 drop per cent

U.S. jobs numbers on Friday bolstered expectations of another hike in rates in December, while hopes of a trade agreement between China and U.S. were quashed by comments from the White House.

Emerging-market stocks fell for the first time in four days on Monday, hit by the prospect of faster rises in U.S. interest rates and uncertainty around the China-U.S. trade war, while data showing rising inflation hit the Turkish lira.

U.S. jobs numbers on Friday bolstered expectations of another hike in rates in December, while hopes of a trade agreement between China and U.S. were quashed by comments from the White House.

"The payroll data is a cause as (there is) anticipation of another Fed hike in the near-term and (that) may have weighed in on some emerging market currencies," said William Jackson, chief emerging markets economist at Capital Economics.

The MSCI index of emerging market stocks fell 0.9 per cent after gaining more than 6 per cent over the last four sessions.

"We saw some very sharp rises in emerging market assets towards the end of last week so this may simply be a reversal of that," Jackson added.

Results of mid-term elections in the United States on Tuesday may play a role this week, with opinion polls showing a strong chance the Democratic Party will win control of the House of Representatives. That would damage the prospect of further moves by President Donald Trump's Republican Party to follow this year's tax windfall for U.S. big business.

Mainland China stocks fell after four days of gains, with a private survey showing China's services sector grew at its slowest pace in over a year last month, suggesting a further loss in economic momentum.

Hong Kong's benchmark fell more than 2 per cent and the yuan weakened by half a per cent.

The Turkish lira fell 0.8 per cent against a steady dollar after data showed annual inflation soared to 25 per cent in October, its highest in 15 years.

Rating agency Moody's said recent tax cuts announced in the country are credit negative and risk rekindling selling pressure on the lira, adding to the currency's woes.

Stocks on Istanbul's benchmark index rose 0.3 per cent, helped by a 5 per cent rise in shares of commercial bank Turkiye Halk Bankasi AS, which took the Turkish bank index 2 per cent higher.

President Tayyip Erdogan said on Saturday he and Trump had discussed the bank as it faces the possibility of U.S. fines for helping Iran evade U.S. sanctions.

South African rand slipped 0.5 per cent after more evidence of the economic pressure with data showing private-sector activity shrank at the fastest rate in over four years in October.

Among European currencies, the Hungarian forint declined, in line with other European and emerging market peers. But, stocks on the Budapest index rose 0.8 per cent, with data showing seasonally-adjusted Purchasing Managers' Index rose more than the month before in October.