Emerging-market stocks fell to a six- week low, led by exporters, and currencies weakened after an unexpected drop in U.S. consumer spending fueled concern growth in the world’s largest economy is faltering. The MSCI Emerging Markets Index sank 1.3 percent to 1,112.60 at 10:22 a.m. in Singapore, set for the lowest close since June 23. South Korea’s Kospi Index (KOSPI) slumped 2.7 percent and Taiwan’s Taiex index retreated 2 percent. South Korea’s won and Malaysia’s ringgit led losses among currencies, with the Bloomberg-JPMorgan Asia Dollar Index touching the lowest level in more than a week. “If Europe and the U.S. still continue to slow away and growth continues to weaken, then it will have an impact on Asian exports and obviously on confidence,” Shane Oliver, the Sydney- based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management, said in a Bloomberg Television interview. U.S. data today will probably show factory orders shrank, while employers added fewer workers in July, following a report yesterday that showed personal spending dropped for the first time in almost two years. Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings for the U.S., while warning of possible downgrades if lawmakers fail to enact debt- reduction measures and the economy weakens. China’s Dagong Global Credit Rating Co. cut the credit rating for the U.S. to A from A+ with a negative outlook, according to an e-mailed statement from Dagong today. The won slumped as much as 0.9 percent to 1,060.38 per dollar, the most since July 12. The ringgit dropped 0.7 percent to 2.9818 and the Philippine peso slid 0.4 percent to 42.325. ‘Risk-Off Sentiment’ “Concern about the U.S. economic slowdown has been sharply growing, creating risk-off sentiment in the market and hurting currencies,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank Ltd. in Tokyo. “That will also impact exports from the region as the U.S. is one of the major buyers of their products.” An “ominous” head-and-shoulders pattern has formed over the MSCI Emerging Markets Index, which may foreshadow declines that will take it to the lowest level in almost a year, according to Auerbach Grayson & Co. The index of developing nation shares has dropped 3.5 percent this year, trailing a 1.3 percent decline in the MSCI World Index. Companies on the emerging-market gauge trade at 10.7 times estimated profits, compared with a multiple of 12.1 times for the MSCI World Index. Samsung, HTC Samsung Electronics Co., Asia’s biggest maker of chips, flat screens and mobile phones, dropped 2.2 percent and LG Electronics Inc. (066570), which gets about 30 percent of its revenue in North America, retreated 2.1 percent in Seoul. Taiwan’s HTC Corp. (2498), which last year got more than 80 percent of its revenue from America and Europe, lost 2.8 percent in Taipei trading. “Concerns about global macroeconomic conditions have been heightened, and companies in more export-oriented economies are feeling a harder pinch,” said Yoo Byung Ok, a Seoul-based fund manager at UBS Hana Asset Management Co., which manages about $17 billion. “Nobody knows for sure what the future developments will be following a potential downgrade of the U.S. credit rating.” Epistar Corp. (2448), a light-emitting diode maker, slid by its 6.9 percent daily limit and was poised to close at the lowest level in more than two years. The company’s share-price estimate was cut to NT$58.50 from NT$73 at Macquarie Group Ltd., which has an “underweight” rating on the company. To contact the reporters on this story: Weiyi Lim in Singapore at wlim26@bloomberg.net; Yumi Teso in Bangkok at yteso1@bloomberg.net To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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