Stocks of developing nations fell, dragging the MSCI Emerging Markets Index down 10 percent from its 2009 peak, and oil approached a similar decline, on concern the recovery will be weaker than economists forecast. The yen rose for a third day against the dollar.

The emerging-markets index of 22 countries lost 2 percent, the most in four days, as of 10:34 a.m. in London. Russian stocks, which entered a bear market yesterday after the Micex index sank more than 20 percent, dropped 0.6 percent. Crude fell as much as 1.7 percent to $66.37 a barrel in New York, approaching the 10 percent decline that would mark a so-called correction from this year’s high.

Oil and gasoline futures fell after the World Bank forecast yesterday that the first global recession since World War II will be deeper than it predicted in March. U.S. wealth may take 15 years to rebound, Edmund Phelps, a professor at Columbia University and the winner of the 2006 Nobel Prize for economics, said in a Bloomberg Television interview.

“After the World Bank report yesterday we see more concern about the return of negative growth dynamics,” said Michael Ganske, head of emerging-market research at Commerzbank AG in London. “Investors realize that all the discussions of a sharp, V-shaped recovery are not going to materialize.”

The yen strengthened against all 16 most-traded currencies as investors pulled out of higher-yielding assets. The Japanese currency advanced 0.7 percent against the dollar and 0.5 percent versus the euro.

Source/Full Story: Bloomberg.com

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