Reuters – Emerging stocks and bonds slid in a panic sell-off on Wednesday as hedge funds dashed to unwind positions, but Hungary’s central bank tried to throttle a slide in its currency with a three-percentage point rate rise.

The banking crisis that started in developed markets is leading to steep falls in emerging markets, as investors are forced to retrench, analysts and traders say.

"There is a need for hedge funds to withdraw from emerging markets to cover redemptions that are occurring, it is a reversal of the carry trade that is being unwound at a very rapid rate," said Neil Dougall, chief emerging markets economist at Dresdner Kleinwort.

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