EMERGING MARKETS-Stocks out of gas as China virus fears worsen; lower oil prices hit rouble

Most stocks in emerging markets fell on Thursday, as risk appetite took a back seat on rising fears over the spread of a new flu-like virus in China, while Russia's rouble lost ground tracking a decline in oil prices. China has locked down Wuhan, a city of 11 million people, considered the epicenter of the coronavirus outbreak that has claimed 17 lives and infected nearly 600 people.

Safe-haven buying strengthened the Japanese yen, while China's yuan fell to a two-week low. MSCI's index for emerging markets equities slipped 0.8%, while its index for currencies fell by 0.2%.

Analysts said the moves did not show a sense of panic among market players but suggested a bit of profit-taking, as millions of people in China geared up to travel domestically and abroad during the week-long Lunar New Year holidays, which start on Friday. "News that China has effectively quarantined the entire city of Wuhan has rattled markets. With hundreds of millions of people moving around China and Asia as a whole, returning home for Chinese New Year. Perfect conditions for a viral spread" wrote Jeffrey Halley, senior market analyst, Asia Pacific at OANDA in a client note.

"It is thus, quite understandable that some money would be taken off the table until the true extent of the coronavirus issue becomes obvious. No one ever went broke taking a profit. The word, therefore, is don't panic." The Russian rouble weakened against the dollar, as oil prices fell to their lowest in seven weeks, sliding more than 1%.

Stocks in Russia also declined, with gas giant Gazprom falling 0.8% as it expects its January natural gas exports to Europe to decline by a quarter year on year. Traders of regions in central and eastern Europe will remain focused on the euro as the European Central Bank is set to launch a broad review of its policy later in the day.

Hungary's forint, Poland's zloty, and the Czech crown firmed slightly against the euro.