Brazil’s IBovespa led declines among 21 developing-nation stock indexes tracked by Bloomberg, with a 21 percent drop this year. Peru’s Lima General Index fell 20 percent and the Hang Seng China Enterprises Index sank 19 percent. The Philippine Stock Exchange Index posted the biggest gain at 8.9 percent.

OGX Petroleo & Gas Participacoes SA, the Brazilian explorer controlled by billionaire Eike Batista, slipped 82 percent this year, the steepest drop in the MSCI Emerging Markets gauge. Sao Paulo-based utility Eletropaulo Metropolitana SA retreated 61 percent and China Foods Ltd., a Hong Kong beverage maker, dropped 58 percent, data compiled by Bloomberg show.

Local-currency government bonds in emerging countries have slumped 4.8 percent since Dec. 31, data compiled by JPMorgan show. Commodities, as measured by the S&P GSCI Index, dropped 3.3 percent in the same period as demand from China waned.

‘Substantial Inflows’

After years of “substantial inflows,” emerging markets are “vulnerable” to “global portfolio relocations,” Deutsche Bank AG analysts led by Marc Balston in London wrote in a client note on June 13.

ECB President Mario Draghi said June 6 that the central bank sees no reason for “immediate action” on asset purchases or further cuts to its 0.5 percent main interest rate.

Speculation that developed-world interest rates have bottomed out is reducing appetite for the carry trade, where investors borrow cheaply in one country to invest in higher- yielding currencies, often in emerging markets.

The rand in South Africa, where the benchmark rate is 5 percent, is down 21 percent this year against the dollar, the biggest decline among emerging currencies, and lost 14 percent since May 1 alone, data compiled by Bloomberg show. The Brazilian real retreated 11 percent since the start of last month, while the rupee sank 11 percent.

Deutsche Bank, the biggest currency trader, recommends selling Asian currencies, including the yuan, rupiah and ringgit. China’s yuan has lost 0.1 percent since reaching a record high of 6.1203 per dollar last month.

Underweight Call