Worldwide recession fears batter emerging markets

Stocks and bonds fell in Mumbai, Moscow and Shanghai, halting a record emerging-markets rally, as investors became concerned that the US Treasury's $700 billion rescue plan won't be enough to prevent a worldwide recession.

The Bombay Stock Exchange's Sensitive Index, or Sensex, declined 3.1 per cent, led by State Bank of India, which lost the most since August. 21.
 

MAULED FROM MUMBAI TO MOSCOW
TOP SENSEX LOSERS
	23-Sep-08	% Change*
Ranbaxy Labs	308.85	-11.05
DLF	394.6	-6.25
Satyam Computer	331.65	-5.98
TCS	720.75	-5.91
Wipro	390.45	-5.77
HDFC	2198.05	-5.53
ICICI Bank	599.7	-5.48
Jaiprakash Asso	123.05	-5.38
SENSEX GAINERS
	23-Sep-08	% Change*

ACC626.200.27 Tata Power1022.300.16 *over previous close

The S&P CNX Nifty Index on the National Stock Exchange declined 2.3 percent to 4,126.90. Nifty futures for September delivery fell 2.1 percent to 4,147.

“Investors are skeptical about the bailout package,'' said Ajay Bodke, who helps manage the equivalent of $872 million in equities at IDFC Mutual Funds in Mumbai. ''You can't just pump- prime the economy and get out of the mess.''

Russia's benchmark Micex Index dropped 4 per cent to 1,061.14, after a record 29 per cent two-day gain, while a slump in the government's 30-year dollar bonds raised the yield by 13 basis points to 6.9 percent. China's CSI 300 Index slid 3.8 per cent to 2,123.48, ending a 16 percent advance.

“Nobody knows how this plan in the U.S. will turn out,'' said Sebastien de Prinsac, head of international sales at Trust Investment Bank in Moscow. “It's too volatile for most people so they're just taking their cash and waiting for the situation to clear.''

The MSCI Emerging Markets Index of stocks fell 1.6 per cent to 840.78 at 11:52 a.m. in London. The extra yield investors demand to own developing nations' bonds instead of U.S. Treasuries increased 10 basis points to 3.6 percentage points, according to JPMorgan Chase & Co.'s EMBI+ index.

US stocks and the dollar tumbled yesterday, with the Standard & Poor's 500 Index losing 3.8 percent, on concern the U.S. plan to support credit markets won't benefit regional banks.

ICICI Bank fell 5.8 per cent, the most in almost two months. Tata Consultancy Services fell to its lowest in almost three years, leading software exporters lower.

Ranbaxy Laboratories fell to its lowest in 18 months on a report that the Canadian drug regulator issued a notice to Ranbaxy to review its medicines.