Emerging-market stocks dropped, almost erasing a weekly gain, as China’s first onshore default sparked concern that swelling bad debt will weigh on global growth. Vale SA led a slide in commodity shares as metals fell.
A surge in interest rates and the worst currency rout since 2008 in developing nations from Russia to Brazil are inflating corporate borrowing costs as $1.5 trillion of obligations come due by the end of 2015.
Sales of structured notes linked to the credit of Russian companies climbed to the highest in three years last month, as investors bet the country’s economy could weather emerging-market turmoil and the crisis in the Ukraine.
Genel Energy Plc, the biggest oil and gas operator in Kurdistan, said its output this year will be higher than currently estimated if the Kurds and Iraq’s central government agree on oil exports to Turkey.
Turkey’s Prime Minister Recep Tayyip Erdogan, whose government has been ensnared by a series of anonymously leaked audio tapes of purported corruption, said his administration may face a new threat from covertly recorded video recordings.