NEW YORK(The Street) -- There is no happy Friday for global equities after rate hikes in Turkey, India and South Africa triggered only brief respite from emerging market woes this week. Across the board global markets were in the red on Friday, with the S&P 500 heading for its worst January in four years - an ominous sign for the year ahead. As uncertainty spreads, even nations with a current-account surplus are not immune: the Hungarian forint hit a two year-low against the euro, as its central bank pledged to continue a long easing cycle.

Interactive Brokers chief market analyst Andrew Wilkinson said investors were reflecting on the initial catalyst for market falls - data suggesting a sluggish growth outlook for the world's second largest economy, China. "Now pressure has now returned to haunt the key emerging market currencies whose central banks have raised the cost of borrowing but pressure valves are being tested elsewhere," he told clients in a note.

Several fund managers believe the malaise will get worst in emerging markets before things improve, noting structural issues which have led to their sell-off - current account deficits funded by declining global stimulus funds - are not easily solved.

All eyes are now to the European Central Bank's policy meeting next week, with several analysts arguing the case for the central bank to ease or take other steps to fight deflation. ECB president Mario Draghi has described inflation below 1% as a 'danger zone' with Danske Bank analysts suggesting inflation will stay below this level until mid-2015.

On the other hand, the Japanese yen and the greenback have gained this month amid a return to "risk-off" sentiment. A strengthening U.S. dollar often prompts investors to seek more bang for their buck by investing offshore. But this time the message from fund managers is clear: give emerging markets a wide berth and stick to Europe, Japan or domestic stocks.

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By Jane Searle in New York