Singapore/Bangkok: Emerging-market assets are headed for a monthly loss as declines in Argentina and Turkey sparked fears of global contagion and amid a renewed intensification of US-China trade tensions. The MSCI EM index of currencies is down 2.2% for August as of 11:57 a.m. in Singapore, poised for a fifth monthly loss, the longest stretch since September 2015. In Asian trading Friday, the Indonesian rupiah slid to its lowest since 1998, while the Indian rupee was set for its biggest monthly drop in three years and a fresh record low.

Plenty of investors, including BlackRock Inc. and Pacific Investment Management Co., have viewed emerging-market declines as an opportunity to stock up on securities likely to benefit from growth rates set to outpace those of the rich world in the long run. But that’s not panned out this month, with developed-nation equities comparing favourably thanks in part to solid corporate earnings.

The emerging asset class’s latest woes came from Argentina, where the peso tumbled to a record low, prompting policy makers to boost a benchmark interest rate to 60%. In Turkey, a report that the central bank’s deputy governor was set to resign sank the lira. Also hurting sentiment: President Donald Trump was said to move ahead with a plan to impose new tariffs on China as soon as next week.

“Argentina’s problems will probably keep investors’ focus on emerging markets with weaker fundamentals, leading to sell-offs in those countries like we have seen in Turkey," said Koji Fukaya, chief executive officer at FPG Securities Co. in Tokyo. “Argentine assets are unlikely to see a turnaround soon with just the IMF support because there hasn’t been any fundamental improvements in the country."

The latest currency crisis in Argentina adds to existing headwinds for emerging markets including the end of an era of cheap money, prospects of a global trade war, American sanctions and deep political uncertainties in places such as Brazil.

The rupiah fell to 14,750 per dollar, the weakest level since the 1998 Asian financial crisis, while the Indian currency slid past an unprecedented 71 against the dollar.

Asia needs to “guard against complacency" especially for those with deficits in their fiscal and current-account balances, strategists including Philip Wee at DBS Group Holdings Ltd. wrote in a note. “With heightened trade tensions threatening to erupt into a full-blown trade war, the region is on alert for disorderly capital outflows."

It’s not just the currencies that have been battered this month among developing economies. An index tracking their equities has lost over 3%, while the Bloomberg Barclays index of EM local-currency government notes is down over 2%.

Some analysts say Asia still remains a relative haven given that region’s stronger economic fundamentals. “At the end of the day, the correlations are not that pronounced and it’s not a monkey see, monkey do kind of reaction for EM Asian currencies," said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore.

Argentina’s peso has dropped 29% against the dollar this month, the worst performer among major emerging market currencies tracked by Bloomberg. Turkey’s currency follows closely, with a 27% slide. The Thai baht and South Korean won are at the top of the pack, heading for gains of 1.6% and 0.4%, respectively.

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