Emerging-market stocks continued to drop, approaching a six-year low as China’s move to weaken the yuan pounded developing-nation currencies. The South Korean won slid after North Korea said it successfully tested a hydrogen bomb sparking international concern which affected sentiment. The won dropped to the lowest level in three months. The yuan slid to a five-year low, while Malaysia’s ringgit led a gauge of developing-nation currencies to a record low.

Technology companies were the biggest decliners in the MSCI Emerging Markets Index as Taiwan’s Largan Precision Co. paced losses for Apple suppliers after a report the U.S. company will cut output of its latest iPhones.

Chinese stocks rose as government efforts to shore up the share market took shape after the worst start to a year on record. The People’s Bank of China lowered the yuan reference rate to the weakest since April 2011, spurring concern that the government is facing pressure to devalue its currency to revive growth in the world’s second-biggest economy. As a consequence this is raising the risk that developing nations will have to weaken their currencies to stay competitive.

Over in Europe, we are two days back from the worst December in more than a decade and European stock investors are coping now with the most volatile start to a year since 1999. While stocks everywhere have been under pressure due to the concerns about a China-led recession mixed with divergent growth signals, Europe has borne the brunt of it, with swings in the Euro Stoxx 50 Index exceeding Asian and U.S. counterparts since the week began. Monday’s 22 percent surge in a regional volatility measure jolted investors looking for a respite after three years of increasingly violent price fluctuations.

Albeit two days are too few to go by, and strategists expect European shares to end the year higher. One house however disagrees, as HSBC Holdings Plc is cutting its equity allocation by almost half in favour of bonds. Their view is that the region’s economic recovery is looking fragile and the data-dependent European Central Bank is running out of policy tools to support it, resulting in little left to protect investors from bigger and more frequent market upheaval.

While volatility has become a market norm, it hasn’t stopped money flowing into European stocks. About $1.7 billion found their way into the asset class in the last week of 2015, making the year the best on record, according to Bank of America Corp.

With the next ECB meeting and earnings season around the corner investor sentiment is generally expected to soon pick up. Analysts expect profit growth at European companies to accelerate every year through 2017, and weaker than expected inflation in the euro-area has prompted speculation the ECB will expand its stimulus package. Analysts are also expecting factors such as the low oil price to finally be reflected in some companies’ margins.