EM stocks fall as tech shares drop, economic data worsen

Emerging-market shares fell on Wednesday as tech stocks came under pressure from a US investigation of technology companies, while weak data in some major economies aggravated concerns over global growth.

Developing-world tech stocks, dominated by Asian listings, fell 0.5% to end three days of gains after the US Justice Department said it was opening an antitrust investigation of major digital firms.

However, Chinese and Hong Kong stocks got a boost from progress on US-China trade. White House economic adviser Larry Kudlow said on Tuesday it was a good sign that top US officials would travel to China to discuss reviving stalled trade talks.

Offsetting the trade optimism were global growth worries after economic data from the euro zone and Japan were released .

“Global growth has already been stifled by the protracted impasse between the world’s two largest economies,” said Han Tan, market analyst at FXTM.

“While the resumption of trade talks appears to mitigate any near-term deterioration in US-China tensions, prudent investors will not get carried away, seeing as a meaningful deal still seems a long way off at this point in time,” he added.

South Korean stocks fell nearly 1% as chipmakers shed recent gains. Trade tensions between Seoul and Tokyo over compensation for wartime forced labourers showed scant signs of abating.

Indices in Mumbai , Moscow and Johannesburg all fell 0.3% to 0.6%.

Currencies in the developing world gained, with Russia’s rouble rising along with crude oil prices.

South Africa’s rand also rose after June inflation data came in better than expected.

In emerging Europe, Hungary’s forint gained 0.2%, a day after the central bank left interest rates unchanged and affirmed its accommodative stance.

Investors are now looking to a European Central Bank meeting on Thursday, amid expectations it may cut interest rates.