Emerging-market stocks fell to the lowest in a week, as European leaders cut off Greek aid payments before a referendum on a bailout deal and the U.S. Federal Reserve reduced its forecast for the economy.

The MSCI Emerging Markets Index slid 1.4 percent to 963.59 as of 2:44 p.m. in Shanghai, set for its lowest close since Oct. 26. South Korea’s Kospi Index (KOSPI) lost 1.5 percent, Taiwan’s Taiex Index dropped 1.8 percent and Thailand’s SET Index declined 1.4 percent. The Shanghai Composite Index rose for a third day as a report on non-manufacturing industries boosted speculation the government will accelerate measures to spur the economy.

Hynix Semiconductor Inc. and HTC Corp. led declines for companies that sell to the U.S. as Fed Chairman Ben S. Bernanke said more steps may be taken to boost the economy. German and French leaders holding emergency talks on the eve of a Group of 20 summit in Cannes, France, withheld 8 billion euros ($11 billion) of assistance. They warned Greece will surrender all aid if it votes against a bailout package.

“There seems to be no immediate solution for the Eurozone problems and that is keeping investors nervous,” Gurunath Mudlapur, managing director at Atherstone Capital Markets Ltd. in Mumbai, said by phone. “Emerging markets are likely to continue bearing the pain caused by problems in the developed world.”

The emerging-markets gauge rallied 9.8 percent last week, its biggest weekly gain since December 2008, as Europe appeared to be closing in on a deal to contain its debt crisis, reports showed the U.S. economy grew faster and China hinted at easier monetary policy.

The gains have pared this year’s losses to 16 percent, compared with a 7 percent drop in the MSCI World (MXWO) Index.
China Slowdown

China’s purchasing managers’ index of non-manufacturing industries fell to 57.7 from 59.3 in September, the China Federation of Logistics and Purchasing said on its website today. Manufacturing indexes released Nov. 1 gave contradictory readings. A gauge from the CFLP and the government fell to the lowest level since February 2009, while a measure released by HSBC Holdings Plc and Markit Economics rose.

Hynix, the world’s second-largest maker of computer-memory chips, fell 2.9 percent in Seoul. LG Electronics, the world’s third-biggest mobile phone maker that gets about 30 percent of sales from North America, tumbled 10 percent amid speculation the company may sell new shares. Samsung Electronics Co., Asia’s biggest maker of chips, slid 0.4 percent. HTC Corp., a smartphone vendor, slid 4.1 percent in Taipei, while Taiwan Semiconductor Manufacturing Co. dropped 0.5 percent.

China Life Insurance Co. rallied 7.4 percent in Hong Kong after Sinolink Securities Co. recommended insurers. China Pacific Insurance (Group) Co. climbed 5.7 percent.