Emerging Stocks Fall From 7-Month High

Emerging-market stocks fell from a seven-month high on concern the U.S. and China will refrain from further steps to ease monetary policy as their economies improve, curbing appetite for emerging-market assets.

The MSCI Emerging Markets Index (MXEF) declined 0.5 percent to 1,073.9 as of 3 p.m. in London, snapping a two-day, 2.2 percent gain that took it to its strongest level since Aug. 3. Benchmark gauges in Russia and Poland slipped 0.2 percent. OAO Lukoil (LKOH), Russia’s second-biggest oil company, retreated after its fourth- quarter profit missed estimates. Brazil’s Bovespa Index gained 0.9 percent.

China’s manufacturing improved for a third straight month in February, signaling the world’s second-biggest economy is maintaining momentum amid the euro area’s debt crisis. In the U.S., the Institute for Supply Management’s factory index fell to 52.4 in February from 54.1 a month earlier, the Tempe, Arizona-based group’s data showed today. Readings above 50 signal growth.

“As the U.S. economy continues to recover and with China’s manufacturing still expanding, there’s less likelihood of further monetary easing,” said Castor Pang, head of research at Core-Pacific Yamaichi International Ltd in Hong Kong.

The MSCI Emerging Markets Index has climbed 17 percent this year, while the MSCI World gauge gained 9.9 percent. The measure of developing nations is valued at 11 times estimated profit, below the four-year average of 12, according to data compiled by Bloomberg.

Purchasing Data

China’s purchasing managers’ index rose to 51.0 from 50.5 in January, China’s statistics bureau and logistics federation said today. That’s the highest level since September. Economic data in the first two months are distorted by the Chinese New Year holiday.

The Labor Department said today the number of Americans filing first-time claims for unemployment insurance payments fell to a level matching a four-year low.

“The big question is whether the good American trend is going to continue or not,” said John Plassard, director at Louis Capital Markets SA in Geneva.

Russia, Turkey, Hungary

Russia’s 30-stock Micex (MICEX) Index slipped after closing yesterday at the highest since Aug. 4. OAO Mechel (MTLR), Russia’s biggest producer of coal for steelmaking, retreated 1.4 percent. OAO Transneft, the state oil pipeline operator, lost as much as 2.3 percent.

Turkey’s benchmark ISE National 100 Index (XU100) added 0.1 percent. Mardin Cimento Sanayii & Ticaret AS, a cement producer, gained 1.3 percent after 2011 profit beat estimates.

In Poland, the Wig 20 Index (WIG20) fell for a second day. PBG SA (PBG), third-largest builder, lost 3.6 percent after fourth-quarter profit missed analysts’ estimates.

Brazil’s Bovespa Index rebounded from yesterday’s 0.2 percent declined, led by a 5.4 percent jump in Marfrig Alimentos SA (MRFG3), Latin America’s second-largest beef producer.

Home Prices

China’s February home prices posted the biggest decline in 19 months, according to SouFun Holdings Ltd., the nation’s largest real-estate website owner. Soho China Ltd., a homebuilder in Shanghai and Beijing, retreated 3.5 percent.

The Markit iTraxx SovX CEEMEA Index of eastern European, Middle East and Africa credit-default swaps retreated seven basis points to 266, according to data provider CMA.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries declined seven basis points, or 0.07 percentage point, to 350, according to JPMorgan Chase & Co.’s EMBI Global Index.

To contact the reporter on this story: Weiyi Lim in Singapore at wlim26@bloomberg.net Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net;

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.