June 1 (Bloomberg) -- Emerging-market stocks dropped for the first time in five days as slower manufacturing growth in China and Europe spurred concern the global economic recovery may wane.

The MSCI Emerging Markets Index fell 1.7 percent to 910.40 at 11:03 a.m. in New York, extending last month’s 9.2 percent slump, the biggest since October 2008. Equity indexes in Hungary, Indonesia and India slid more than 1.5 percent. India’s rupee and Malaysia’s ringgit fell more than 1.5 percent versus the dollar, leading declines among emerging-market currencies. Bonds dropped for the first time in four days.

“We now have more doubts about the strength of the global recovery,” Geoff Lewis, head of investment services at JPMorgan Asset Management, said in a Bloomberg Television interview. “At the moment, we’re caught in the grip of global de-risking. There is also another factor and that is fears of Chinese monetary tightening and over whether China will be able to achieve a soft landing.”

China’s Purchasing Managers’ Index missed the median estimate in a Bloomberg survey, suggesting that a government crackdown on property speculation is cooling growth. Nouriel Roubini, the New York University professor who predicted the global financial crisis before markets peaked, said yesterday that economies in China, Brazil and India may be overheating and asset bubbles may be developing.

A gauge of manufacturing in the euro region declined to 55.8 in May from 57.6 the previous, adding to speculation that Europe’s debt crisis may hurdle the region’s economic recovery.

Emerging-Market Bonds

Emerging-market bonds declined 0.4 percent, according to JPMorgan Chase & Co.’s EMBI+ Index. The extra yield investors demand to hold bonds in developing nations over U.S. Treasuries rose 10 basis points today to 335 basis points, based on JPMorgan data.

OAO Lukoil, Russia’s second-largest oil company, dropped 0.9 percent while Mol Nyrt., Hungary’s biggest oil refiner, sank 1.9 percent after Crude oil fell earlier today.

Brazil’s Bovespa index headed for the biggest decline in a week, as slower Chinese manufacturing growth and the prospect of higher interest rates in India spurred concern that the global economic recovery may falter. Vale SA, the world’s largest iron- ore producer, fell as metals prices tumbled and the company said its market share in China may drop this year.

Hungary’s BUX equity index dropped 1.6 percent, the most in a week, and the forint weakened 0.1 percent against the euro after its purchasing managers’ index fell in May for the first time in five months, suggesting that the economic recovery from the worst recession in almost 20 years is stuttering.

China

China’s Shanghai Composite slid 0.9 percent. China’s Purchasing Managers’ Index dropped to 53.9 from 55.7 in April, seasonally adjusted, the Federation of Logistics and Purchasing said in an e-mailed statement today. That compares with the median estimate of 54.5 in a Bloomberg survey of 18 economists. Readings above 50 indicate an expansion.

Credit Suisse Group AG cut its 12-month forecasts for three China stock indexes, with analysts Peggy Chan and Vincent Chan saying that consensus earnings estimates may be “too optimistic” given the nation’s tightening policy and Europe’s debt crisis.

South Korea’s Kospi Index lost 0.7 percent and Indonesia’s Jakarta Composite Index declined 2.6 percent after reports today showed inflation in the two nations accelerated in May.

In South Korea, consumer prices rose 2.7 percent in May from a year earlier, the statistics office said. A separate report from the Ministry of Knowledge Economy also said exports increased 41.9 percent in May from a year earlier, a seventh straight increase. Indonesia’s inflation accelerated by 4.16 percent last month after gaining 3.91 percent in April.

--With assistance from Tal Barak Harif in New York, Linzie Janis in London, Susan Li in Hong Kong and Krystof Chamonikolas in Prague. Editors: Linda Shen, Alan Mirabella.

To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net

To contact the editor responsible for this story: Linus Chua at lchua@bloomberg.net