Emerging stocks edged down on Tuesday as inflation worries persisted and weaker metals prices knocked South African shares and the rand.
Chinese equities .SSEC extended losses, shedding 0.6 percent to close at their lowest since Sept. 30. China has been one of the worst-performing emerging stock markets this year, as concerns about monetary tightening haunt investors.
Tightening fears in Asia are also hurting commodities prices in general and gold in particular, hitting oil and metals exporters in turn.
Gold prices have been coming off because of the tightening in Asia, especially in China, and because gold's safe-haven attraction is less, given the euro zone is seen as less vulnerable, said Elisabeth Gruie, emerging markets strategist at BNP Paribas.
The MSCI emerging equities index .MSCIEF turned negative at 0949 GMT, dipping around 0.1 percent and the Thomson Reuters emerging Europe index .TRXFLDEEPU fell 0.4 percent.
South African shares .JTOPI dropped around 0.8 percent to a two-week low as spot gold XAU= touched a 10-week low on Tuesday.
Copper also fell more than 1 percent and the rand ZAR= suffered, losing 0.3 percent.
Russian stocks .IRTS softened 0.4 percent as benchmark U.S. crude oil prices slipped by almost 1.5 percent.
India hiked key interest rates for the seventh time since March on Tuesday, in a bid to crack down on swollen prices.
Shares in the Indian index .BSESN slid 0.95 percent, taking losses so far this year to 7.5 percent.
Inflation was also on the agenda in Turkey, where 2011 inflation forecasts were revised up a little -- to a mid-point of 5.4 from 5.9 -- sending the yield on the benchmark Nov. 7, 2012 bond to 7.63 percent from 7.53 percent earlier.
Turkey's lira TRY= was down a little, after Governor Durmus Yilmaz declined to comment on whether Turkey will raise interest rates in the second half of 2011.
The upward revision of inflation forecasts follows an increase in banks' required reserve ratios on Monday and a surprise cut in policy rates last week. This mixed strategy has raised eyebrows in the market and led to confusion despite the central bank's assurances that the net effect of its policy will be tightening.
The central bank is trying to curb hot money inflows and currency appreciation at the same time as tightening domestic liquidity conditions, especially credit growth.
While accepting that the bank is trying to tighten policy by tightening credit conditions, its efforts might be overwhelmed by fiscal easing this side of elections, said Tim Ash, head of CEEMEA research at RBS, in a client note.
Turkey is due to hold parliamentary elections in June.
Turkey's stock index .XU100 was broadly flat.
The forint EURHUF= was also flat despite the Hungarian central bank's decision to hike interest rates by 25 basis points on Monday. Analysts now expect a pause in the tightening cycle.
Hungary's stock index .BUX was around 0.2 percent lower, after earlier hitting a 2-1/2 month high, while Polish equities were about 0.8 down .WIG20.
In debt markets, emerging sovereign debt spreads 11EMJ were 1 basis point wider at 240 basis points over U.S. Treasuries.
Debt insurance costs in Tunisia were one basis point tighter at 177 basis points, but the country's stock market .TUNINDEX was still closed amid political instability.