The MSCI's index for emerging market stocks fell 1%, with Hong Kong's Hang Seng index ending 2.7% lower. Bank of East Asia shares dropped more than 4% to a 10-week low, while Standard Chartered's Hong-Kong listing tumbled more than 7%, the worst performance in a year. UBS said over the weekend it would buy fellow Swiss bank Credit Suisse for 3 billion francs ($3.2 billion). Shares in Credit Suisse plunged more than 60% in European trading while UBS was down 9% at 0950 GMT. "It is not yet known exactly where more pain will emerge in the banking sector, but investors fear the problems are not yet over," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. "But as risk aversion grips the sector, the worry is that overall banks will become more cautious in their lending ... worries are rattling investors about what repercussions a potential lending squeeze will have on the global economy." The Federal Reserve, European Central Bank and Bank of Japan vowed to make it even easier to buy dollars, upping the frequency of supply operations. China's stocks also ended lower, while Turkish stocks fell 0.8%.
Currencies in the developing world were largely muted, with the MSCI's EMFX index down 0.2%, ahead of a key Federal Reserve interest rate decision during the week.
The Fed is now expected to keep its key lending rate unchanged at the end of its two-day policy meeting on Wednesday, in a stark contrast to last week's bets of a 25 basis-point hike.
South Africa's rand fell 0.6% against the dollar, ahead of planned protests by the Marxist Economic Freedom Fighters (EFF) party, for crippling power cuts and to demand the resignation of President Cyril Ramaphosa. Stocks in the country, however, rose 1% amid higher gold prices.
For GRAPHIC on emerging market FX performance in 2023, see For GRAPHIC on MSCI emerging index performance in 2023, see For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru; Editing by Jacqueline
Wong)
