Stocks, emerging market currencies tumble

Risk aversion tightened its grip on investors on Friday.

As Bloomberg reports, global stocks tumbled the most since June. The MSCI All-Country World Index fell 1.9 percent. The MSCI Emerging Markets Index tumbled 1.4 percent but the S&P 500 fell by an even bigger 2.1 percent.

US ten-year Treasury yields fell five basis points to 2.73 percent and touched 2.70 percent, the lowest since November. Ten-year German bund yields also fell five basis points to 1.66 percent, the lowest since August on a closing basis.

Emerging market currencies were badly hit on Friday. The Turkish lira fell 2.2 percent against the US dollar, extending the decline for the month to 9 percent. The South African rand fell 1.1 percent to the weakest level since October 2008. Argentina’s peso, which fell 12 percent on Thursday after policy makers devalued the currency, lost another 1.5 percent on Friday.

The yen, which traditionally gains on rising risk aversion, rose against all 16 of the major currencies, advancing 1 percent against the US dollar and 1.1 percent versus the euro.