By Wayne Cole
SYDNEY (Reuters) - Asia share markets skidded and the euro hit one-year lows on Monday as a renewed rout in the Turkish lira infected the South African rand and drove demand for safe harbours, including the U.S. dollar, Swiss franc and yen.
EMini futures for the S&P 500 were off 0.4 percent, while 10-year Treasury yields dipped further to 2.85 percent.
China's blue chip index shed 1.4 percent, while Hong Kong stocks lost 1.6 percent as the local dollar fell to the limits of its trading band.
The lira found just a sliver of support when Turkish Finance Minister Berat Albayrak said the country had drafted an action plan to ease investor concerns and the banking watchdog said it limited swap transactions.
Yet the dollar was still up almost 10 percent on the day at 7.0000 lira. This time last month it was at 4.8450.
"The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis," said Andrew Kenningham, chief global economist at Capital Economics.
The Turkish equity market was less than 2 percent of the size of the UK market, and only 20 percent was held by non-residents, he added.
"Nonetheless, Turkey's troubles are a further headwind for the euro and are not good news for EM assets either."
Indeed, the single currency sank to a one-year trough against the Swiss franc around 1.1300 francs, while hitting a 10-week low on the yen around 125.45.
Against the U.S. dollar, the euro touched its lowest since July 2017 at $1.13700. It was last at $1.1380 and still a long way from last week's top at $1.1628.
The dollar eased against the safe haven yen to 110.21, but was a shade firmer against a basket of currencies at 96.431.
The Argentine peso and South African rand were also caught in the crossfire, with the dollar adding 5 percent on the rand. Dealers said Japanese retail investors had been squeezed out of long positions in the rand sending the yen steaming higher.
"Turkey's massive pile of corporate debt denominated in foreign currencies, but a rapidly sliding currency - and inflation that's threatening to go exponential - is a toxic combination."
In commodity markets, gold found little in the way of safety flows and was last down at $1,208.21 an ounce.
Oil prices were mixed with Brent off 14 cents at $72.67 a barrel, while U.S. crude added 2 cents to $67.65.
(Editing by Sam Holmes and Eric Meijer)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)