Emerging Stocks Decline for Third Week on Korea

stocks in emerging markets fell, sending the benchmark index to its third weekly decline on supply concerns China to control inflation, tensions between North and South Korea and Europe to the crisis debt global recovery will stall.

The MSCI Emerging Markets Index fell 1.6 percent to 1,081.06 until 5 pm in New York. The indicator fell 2.8 percent in the last five days, its third weekly decline and the longest losing streak since May.

South Korea's Kospi index fell 1.3 percent, while the Shanghai Composite Index fell 0.9 percent, the first decline in three days. Hungary Bux index fell 2.8 percent after the government moved to effectively nationalize private pension funds, so the indicator worst actor in the world today.

Brazilian Bovespa index fell 1.6 percent, ending the biggest weekly decline in almost five months, on signs that the central bank will raise interest rates and a deep concern that the global economy is weakening.

Chinese banks retreated, paced Industrial & Commercial Bank of China Ltd., amid speculation the government may reduce the rate of new loans next year. In South Korea, the defense minister quit, while the nation was preparing for joint military exercises with U.S. from November 28 after an artillery attack launched by North Korea this week. The won weakened 1.9 percent, ready for a third consecutive weekly decline.

"The same two subjects, peripheral Europe and Korea, are driving the negative sentiment," led the RBC Capital Markets analyst Nick Chamie, said in a report in today's emerging markets, adding that further selling pressure was "speak more than Chinese imminent rate hike."

OTP Bank Nyrt., Hungary's biggest lender, slid to 5.6 percent. The forint has depreciated 0.9 percent against the euro and 1.8 percent against the dollar.

Sell Recommendation Hungary

The Hungarian government plans in exchange for private assets of pension funds that the State is concerned the European Commission, Bruxinfo news website, citing the spokesman Amadeu Altafaj.

Hungarian assets must be sold by investors, given the "complete unpredictability" of government, Simon Quijano-Evans, the Vienna-based head of emerging markets strategy at Credit Agricole Cheuvreux SA, said in a note e-mailed .

The concerns of Portugal and Spain may join Ireland in search of a bailout of the European Union and the International Monetary Fund darker investor sentiment.

Brazilian Central Bank increased the benchmark rate to 12.25 percent from 10.75 percent in April to curb inflation, Bank of America Corp. said. Bank of America had forecast policy makers with the rate of 10.75 percent through 2011.

Turkey's ISE National-100 fell 1.5 percent, more than 8 percent from its record high reached on 9 November.

Polish WIG20 index lost 1 percent and Russia's MICEX index fell 0.3 percent.

The zloty slid 1.4 percent against the euro and 2.3 percent against the dollar. The rand lost 1.6 percent.

Oil fell to 1.3 percent, to $ 82.78 a barrel and copper fell 1.2 percent in London trading. Gold lost to 1.8 percent.

Indonesia, India

The difference between the yield investors demand to hold emerging market bonds and U.S. Treasuries widened 5 basis points to 252, according to JP Morgan Chase & Co. EMBI index.

Jakarta, Indonesia Composite Index fell 1.6 percent and the Philippine Stock Exchange index fell 1.1 percent. India's Sensitive Index, or Sensex, sank 0.9 percent.

The Shanghai index yesterday had retreated from 8.3 percent reached almost seven months on November 8 by the concern of monetary tightening will affect economic growth accelerated. The central bank last week ordered banks to set the largest reserves set aside for the second time in two weeks after rising interest rates in October, the first increase since 2007.