Emerging equities at 4-year low

By Carolyn Cohn

LONDON (Reuters) - Emerging equities crashed to four-year lows on Friday -- down 15 percent on the week -- while emerging sovereign debt spreads rose to their widest in six years as investors continued to flee.

Benchmark emerging stocks have lost 60 percent this year and are down 38 percent this month, underperforming the all-countries stock index which has lost 46 percent in 2008.

Until October, emerging markets had not suffered disproportionately in the global credit crisis, but analysts say hedge funds have now been forced to unwind highly-leveraged positions in emerging markets to obtain cash.

Sell-offs have been sharp in European trade, as analysts see emerging Europe as among the riskiest plays in emerging markets.

"Equities are still selling off across the board," said Lars Christensen, head of emerging markets research at Danske in Copenhagen.

"We are less worried about Latin America and Asia in the long run. The big problem is central and eastern Europe."

Benchmark emerging equities dropped 6.75 percent to 481.40, the index's lowest since November 2004.

Russian stocks fell 10.63 percent, with the authorities closing the market temporarily as they have repeatedly in recent weeks.