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MSCI's EM index down 1.4%, currencies gauge dips

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Banking fears spread across geographies after US lenders

tank

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Oil headed for weekly loss; supply uncertainty grows

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Safe-haven rush powers gold above $4,300 an ounce

By Niket Nishant

Oct 17 (Reuters) - Emerging market stocks and currencies

fell on Friday, capping a volatile week dominated by renewed

trade jitters, while worries about the banking industry and a

slide in oil prices added another layer of concern.

After shares of U.S. lenders fell on fears of exposure to

bankrupt auto parts maker First Brands and subprime lender

Tricolor, financials-heavy indexes in Europe and Asia came under

pressure.

Poland's blue-chip WIG20 index fell 1.2%, while PX

Prague SE dropped 1.1%. The financials-heavy MSCI ASEAN

index touched a two-month low and was last down

nearly 1%. Turkey's banks fell 1.2%.

"There has not been a downturn or recession in over a decade

that would have allowed regional banks to test their loan

portfolios in times of stress, which would have allowed

investors to better rank the sector based on credit quality,"

said J.P. Morgan analyst Anthony Elian.

Oil's slide towards a weekly loss deepened the strain, a

setback for Middle Eastern economies reliant on crude revenues.

The weakness comes at a time of heightened uncertainty over

the global oil supply. A White House official said India has

halved its purchases of Russian oil, but Indian sources said no

immediate reduction had been seen.

U.S. President Donald Trump and Russian President Vladimir

Putin have also agreed to meet in Hungary to discuss ending the

war in Ukraine, a move that could reshape energy flows and, in

turn, impact oil prices and Middle Eastern markets.

DIVERGENT PATHS

India's equity benchmarks reversed early losses on Friday,

pushing Nifty 50 to a one-year high as gains in Reliance

Industries ahead of its results outweighed losses in

Infosys and Wipro.

Banking and financials indexes in the

country bucked global weakness and hit record highs, before key

earnings from HDFC Bank and ICICI Bank.

On the other hand, Chinese stocks dropped 1.3% and

were set for the steepest weekly decline in 10 weeks due to

investor caution over trade uncertainties and profit-taking in

AI-linked shares.

The moves on Friday highlight how torn emerging markets

investors remain between hopes of economic resilience and

persistent uncertainty.

While tariffs have so far proved less damaging than feared,

prompting the International Monetary Fund to raise its outlook

for global growth this week, sentiment has been buffeted by

shifting headlines and fragile confidence.

Overall, an MSCI index of emerging market equities

fell 1.4% and was on pace to end the week slightly lower. The

equivalent currencies gauge dipped 0.2% and was

set to end the week flat.

Currencies, however, may see some strength in the coming

weeks as the U.S. dollar weakens further.

"A sudden surge in scrutiny of U.S. regional banks is

hitting equities and the dollar. It's hard to pick a bottom in

the ongoing USD sell-off, which may well run a bit further from

here," economists at ING wrote in a note.

Gold, meanwhile, has surged past $4,300 an ounce to a record

high for the fourth straight session. The surge in the

traditional safe-haven asset signals lingering caution, with

investors wary of lofty equity valuations despite the AI-driven

rally.