Emerging-market stocks fell from a one-week high as orders for goods in the U.S. rose less than analysts estimated and on speculation Chinese companies’ profits are being cut by the global slowdown.
The MSCI Emerging Markets Index (MXEF) dropped 1.1 percent to 1,043.90 at the close in New York, snapping a three-day advance, as energy and materials producers retreated. Jiangxi Copper Co. (600362), China’s biggest producer of the metal, dropped 5.5 percent after second-half profit slid 18 percent. OAO Lukoil (LKOH), Russia’s biggest non-state oil producer, slumped to a one-month low as 29 of the 30 companies on the benchmark Micex index declined. BM&FBovespa SA (BVMF3), Brazil’s biggest securities exchange, dropped the most in four weeks after it said it was ordered to pay a penalty.
Orders for U.S. durable goods rose 2.2 percent in February, below the 3 percent median forecast in a Bloomberg survey of economists. Earnings for Chinese companies listed in Hong Kong won’t grow this year, said Societe Generale SA, which cut a previous forecast for a 5 percent increase. Profits for Chinese industrial companies had their first January-February decline since 2009 amid slowing exports, the National Bureau of Statistics said on its website yesterday.
“It was certainly China that spooked the market this morning and the data in the U.S. was a touch disappointing too,” Neil Shearing, chief emerging-markets economist at Capital Economics Ltd. in London, said by phone. “Our sense is still that a softer landing is perhaps more likely in China than a hard landing that some seem to be assuming.”
Emerging-market stocks have retreated 3.3 percent this month, cutting their rise this year to 14 percent. The MSCI World Index (MXWO) of developed-nation shares has gained 11 percent, to trade for 13.1 times estimated earnings. That’s more expensive than emerging-market equities, which trade for 10.7 times estimated earnings.
The iShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF that tracks developing-nation shares, lost 1.7 percent to $42.69. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a gauge of options prices on the fund and expectations of price swings, rose 5 percent to 26.91, the highest in two weeks.
BM&FBovespa slid 2.6 percent after saying a local court ordered it to pay 8.42 billion reais ($4.62 billion) in a civil case related to central bank futures trading around the time of the 1999 currency devaluation. The benchmark Bovespa index lost 1.5 percent, closing at the lowest since Feb. 14.
The Micex Index (MICEX) fell 2.2 percent in Moscow, led by energy companies. OAO Lukoil (LKOH), Russia’s biggest non-state oil producer, fell 2.4 percent and OAO Gazprom (GAZP), the world’s largest natural gas company, retreated 1.5 percent. Oil dropped 1.8 percent in New York. OAO Mechel (MTLR), Russia’s largest producer of coal for making steel, slid 4.4 percent.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong lost 1 percent.
Gome Electrical Appliances Holdings Ltd. (493), the nation’s second-biggest electronics retailer, slumped 21 percent in Hong Kong after missing earnings estimates. Renhe Commercial Holdings Co. (1387), which develops underground shopping centers, plummeted 20 percent to a record low after profit excluding revaluations in 2011 declined 92 percent from a year earlier, according to Citigroup Inc., based on the earnings from the company yesterday.
The ruble depreciated by 1.3 percent against the dollar, as most emerging-market currencies weakened. The rand retreated 0.9 percent.
Turkey, South Africa
Eregli Demir & Celik Fabrikalari TAS (EREGL), Turkey’s largest steelmaker, plunged 11 percent after ArcelorMittal, the world’s biggest steelmaker, sold a quarter of its stake in the company. The ISE National 100 Index (XU100) slid 1.1 percent in Istanbul.
The FTSE/JSE Africa All Share Index (JALSH) retreated 0.7 percent in Johannesburg, the first decline in four days.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell three basis points, or 0.03 percentage points, to 337, according to JPMorgan Chase & Co.’s EMBI Global Index.
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