MSCI’s emerging market equity index slipped as much as 1 percent to hit its weakest level since July 2017 Markets in Asia chalked up hefty losses after US President Donald Trump warned on Friday he was ready to slap tariffs on virtually all Chinese imports to the US LONDON: Fears over a rapid escalation of trade wars hit emerging markets on Monday, sending stocks to a fresh 2018 low and hurting major currencies with India’s rupee tumbling to record lows and Russia’s rouble at its weakest in two years. MSCI’s emerging market equity index slipped as much as 1 percent to hit its weakest level since July 2017 with markets in Asia chalking up hefty losses after US President Donald Trump warned on Friday he was ready to slap tariffs on virtually all Chinese imports to the US. Beijing warned it would retaliate. Chinese mainland stocks ended as much as 1.5 percent lower with shares in suppliers to Apple dropping after Trump tweeted on Saturday that Apple should make products in the US if it wanted to avoid tariffs on Chinese imports. Bourses in export heavyweights such as Hong Kong and Taiwan as well as India’s BSE index nearly matched those declines. Emerging currencies painted a similar downbeat picture, with the EM currency index falling around 0.5 percent and edging back toward a 17 month low hit last week. “Emerging economies have borne the brunt of the market stress since the start of the year,” Didier Saint-Georges, managing director at French asset manager Carmignac wrote in a note to clients. “In drying up the global flow of dollars, the Fed has weakened the entire EM asset class and literally wrecked those countries most reliant on dollar financing. The trade standoff initiated by the Trump administration thus amounts to a double whammy, with contagion doing the rest of the damage.” Facing a widening emerging market selloff, India’s rupee plumbed a fresh record low, with nationwide protests adding to the pressure while an official at the country’s finance ministry pledged the government would take measure to stem the slide in the currency. With a general election less than nine months away, demonstrations against record high petrol and diesel prices shut down businesses, government offices and schools in many parts of India while in some places protesters blocked trains and roads and vandalized vehicles. Russia’s rouble weakened beyond 70 versus the dollar for the first time since March 2016 before recovering its losses, buckling under pressure from uncertainty about US sanctions and concern ahead of a central bank meeting on Friday. Governor Elvira Nabiullina said rates could stay on hold or go higher. But Kremlin economic aide Andrei Belousov said a rate increase would be “highly undesirable,” echoing comments by Prime Minister Dmitry Medvedev who stated late last week that lending rates should be lower.