EMERGING MARKETS-Stocks, FX fall for third day on bleak China data, rate jitters

Assets across emerging markets took a beating on Wednesday, with equities hitting a two-month low following a raft of dismal economic data from China and reduced bets of interest rate cuts in the U.S. MSCI's index for emerging market (EM) equities fell 2% by 0923 GMT, on track for its biggest one-day percentage drop since August last year.

Assets across emerging markets took a beating on Wednesday, with equities hitting a two-month low following a raft of dismal economic data from China and reduced bets of interest rate cuts in the U.S.

MSCI's index for emerging market (EM) equities fell 2% by 0923 GMT, on track for its biggest one-day percentage drop since August last year. Currencies in the region slid 0.4% while the dollar hovered close to a one-month high.

EM assets were in the red for the third straight day as hawkish comments from top policymakers this week dampened expectations of early rate cuts from global central banks. Most Asian equities fell, with China's blue-chip shares hitting their lowest since early 2019 while Hong Kong shares dropped 3.7% to their lowest since November 2022.

Data showed China's economy grew 5.2% in the fourth quarter, missing analysts' expectations and signalling a patchy recovery in the world's second-largest economy. A separate report also pointed to prolonged property sector woes in the country. "The key question is what Beijing can do to improve sentiment amongst consumers and boost domestic demand at the time when their main trading partners - including Eurozone - are relatively weak and demand from the U.S. could soften as well," said Piotr Matys, senior FX analyst at In Touch Capital Markets.

India's blue-chip NSE Nifty 50 was dragged 1.9% lower after bleak quarterly results from top private lender HDFC Bank

. In South Africa, Johannesburg's Top-40 index dropped 1.5%, weighed down by weakness in mining stocks as concerns around demand from China hit metal prices.

The rand slipped 0.6% to trade at about 19.0874 to the dollar following an over 1% drop in the previous session. The Indonesian rupiah held on to declines and was last down 0.3% against the dollar after the country's central bank kept policy rates steady on Wednesday, seeking to stabilise the currency and keep inflation within target.

Hungary's forint dropped 0.5% against the euro as Deputy Governor Barnabas Virag said the central bank will cut interest rates between 6% and 7% by the middle of the year. HIGHLIGHTS ** India's HDFC tumbles 7.9% on weak margins ** Hong Kong tech shares slump 5.0% ** Exxaro Resources biggest decliner on Johannesburg's Top-40

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