Chinese markets. Picture: AFP/FRED DUFOUR
The epicentre of the selloff is in China, where the slowest growth since 1990 and yuan volatility have shaved off $4.3-trillion from the nation’s equities. Picture: AFP/FRED DUFOUR

LONDON/NEW YORK — The $2.3-trillion rout in emerging-market stocks deepened on Thursday as the capital exodus from China showed no signs of abating.

Russia’s rouble sank to a record as investors dumped the currency of the world’s largest energy exporter. Cash injections by the world’s second-biggest economy to ease a money-market squeeze failed to improve sentiment as shares in Shanghai and Hong Kong extended losses.

Qatar led declines among most equity markets in the Middle East as Brent crude traded below $29 a barrel. The rouble weakened as much as 5.7% against the dollar. Brazil’s real slid to the lowest since September after the central bank unexpectedly refrained from raising interest rates.

The JSE all share closed 0.1% lower and the blue-chip top 40 lost 0.16%. The gold index led the losers, falling 0.8%, and financials lost 0.76%. Banks were down 0.64%. Resources led the gainers, up 2.48%, and platinums firmed 1.97%.

The rand clawed back some ground against the dollar but remained vulnerable. It rallied to a session high of 16.57/$, up more than 1% on the day.

Britain’s top share index bounced from its lowest in more than three years after the head of the European Central Bank (ECB) implied further monetary stimulus was on the cards.

The gains extended after oil prices rebounded to set off a rally on Wall Street.

The ECB would review its monetary policy in March, the central bank’s president, Mario Draghi, said.

Britain"s FTSE 100 rose 100.21 points, or 1.8%. The index had entered bear-market territory on Wednesday.

Developing-nation stocks have made the worst start to a year on record with at least 26 emerging and frontier markets in bear territory.

The epicentre of the selloff is in China, where the slowest growth since 1990 and yuan volatility have shaved off $4.3-trillion from the nation’s equities. Lower demand from the world’s second-biggest economy has contributed to a plunge in commodity prices to a record, setting off contagion across exporting nations such as Russia and Brazil.

"The bear sentiment is just a case of the blues for a lot of the investors; there’s a feedback between oil prices, China and rest of the emerging markets," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. "It’s just unfortunately going to take sometime to play out here."

The MSCI emerging markets index slid 0.3% in New York morning trade, reversing earlier gains of as much as 0.9%. The gauge is poised for the lowest close since May 2009, sending valuations to the cheapest since March 2014. Hong Kong’s Hang Seng China Enterprises index lost 2.2% to the lowest close since March 2009.

The Shanghai Composite lost 3.2% to the lowest since 2014. China is trying to hold borrowing costs down.

Bloomberg, Reuters, with Maarten Mittner