EMERGING MARKETS-EM currencies weaken, stocks plunge as commodity rout deepens

Most emerging market currencies inched lower on Monday, ‌after logging robust gains in the previous week, while assets in some markets came under selling pressure following a sharp plunge in commodity prices.

MSCI's index tracking global EM stocks slid 2.2%, on track for its steepest one-day decline in more than two months. South African stocks ⁠lost 2.4%, after falling more than 4% in the previous session. The miner-heavy bourse was on track for one of its steepest intraday declines since April, as gold prices tumbled more than 9% after top commodity exchange CME Group raised margin requirements following a collapse in metals prices last week.

Most heavyweight Asian stocks declined. The index in South Korea retreated 5.3% after marking its ​biggest monthly jump since December 1998 last week, on margin calls triggered by heightened volatility in commodity markets. DOLLAR RALLY TRIGGERED MELTDOWN IN PRECIOUS METALS

U.S. President Donald Trump nominated ‍former Federal Reserve governor Kevin Warsh as his pick to lead the central bank, a candidate markets expect will stop short of the aggressive monetary policy easing associated with other contenders. The move supported the U.S. dollar on Friday, and triggered a meltdown in precious metals as markets assessed the Fed's interest rate path under Warsh.

"Risk aversion is gripping financial markets as the gold and silver sell off deepens. The continued selling pressure is a sign ⁠of an ‌extremely crowded trade that is unwinding, and ⁠it may take time to return to normal," said Kathleen Brooks, research director at XTB. The sell-off showed in regional equities in emerging Europe as well, with indexes in Hungary and Poland down 0.6% and 0.4% respectively. Stocks in ‍Romania shed 1.3%, on track for their third session of losses.

Turkish stocks dropped 2.3%, after a more than 22% rise in January, last seen in July 2023. Indonesian stocks closed 4.9% lower after a $80 billion ​market rout last week that prompted a shake-up at the country's financial regulator. The stock market collapse is the latest sign of trouble in Indonesia's capital markets, ⁠which are being left out from a rush to EMs.

INVESTORS POURED MONEY INTO EM IN JANUARY EM equities rallied last month as global investors poured in money at the fastest clip in years in January, as a weaker dollar ⁠and diversification away from the U.S. pointed to an extension of the rally the asset class staged last year.

Most Asian currencies were subdued-to-lower against the dollar. Turkey's lira was little changed. However, South Africa's rand appreciated 0.5% against the greenback in choppy trading. MSCI's measure of global EM currencies slipped 0.2%.

Currencies in emerging Europe were subdued against the euro, but Hungary's forint ⁠was down 0.4%. Russia's rouble weakened 0.7% against the greenback, over-the-counter market data showed. Ukrainian President Volodymyr Zelenskiy said on Sunday a new round of U.S.-brokered trilateral talks between Ukraine and Russia ⁠would take place in Abu Dhabi on ‌February 4 and 5.

Credit ratings agency Moody's revised Israel's outlook to "stable" from "negative" on Friday, citing materially reduced exposure to geopolitical risks. HIGHLIGHTS:

** China's factory activity expansion accelerates in January, private PMI shows ** Philippine economy to rebound in 2026 with at least 5% growth, says minister

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