Emerging-market stocks fell to the lowest level in almost three months as shrinking Chinese and European manufacturing output boosted concern a global slowdown will curb demand for exports.
The MSCI Emerging Markets Index (MXEF) slid 1.3 percent to 1,007.96 in New York with energy and consumer staple companies leading declines. The Bovespa index dropped 1.5 percent as JBS SA, the world’s largest beef producer, fell 6.3 percent, its sharpest drop in a month. Wal-Mart de Mexico SAB fell 12 percent, the most since 1998, as the company investigates possible bribery payments to Mexican officials. Equity gauges across Europe slumped, with Poland’s WIG20 tumbling the most in five months.
HSBC Holdings Plc and Markit Economics reported a preliminary reading of 49.1 for their China purchasing managers’ index, compared with a final 48.3 in March, a sixth consecutive month below 50. A euro-area composite index based on a survey of purchasing managers in services and manufacturing fell to 47.4, a five-month low, from 49.1 in March, London-based Markit Economics said in an initial estimate today. Commodities fell for the first time in three days as cocoa, silver and lead declined.
“Commodity price declines are a reflection of global growth weakness,” Simon Quijano-Evans, emerging markets head of research at ING Bank, said in by phone from London. Those declines are “going to hit commodity exports of emerging markets the hardest,” he said.
MRV Engenharia e Participacoes SA, a Belo Horizonte, Brazil-based homebuilder, fell to its lowest level since Jany . 6 after Valor Economico, a Sao Paulo-based newspaper, reported the company has received offers for less than half of the 500 million reais ($265 million) of Brazilian local bonds it’s seeking to sell.
The Micex Index fell 2.6 percent in Moscow as OAO Mechel, Russia’s biggest coal producer for steelmakers, slipped 3.4 percent. OAO Gazprom, the world’s largest gas exporter, retreated 2.9 percent to its lowest level since December.
Hungary’s Budapest Stock Exchange Index slid 2.2 percent to its lowest level in three months while the FTSE/JSE Africa All Shares Index (JALSH) slipped 1.5 percent. Mining companies BHP Billiton Ltd. (BHP) and Anglo American Plc (AGL) fell more than 2 percent as metals prices slid.
The PX Index (PX) retreated 1.7 percent in Prague after the Czech Republic’s governing coalition broke up over Cabinet personnel decisions and trimming the deficit to meet a European Union target. Vienna Insurance Group AG (VIG) slipped 3.3 percent and Komercni Bank AS (KOMB) fell 3.1 percent.
The MSCI Emerging Markets Index fell 0.6 percent last week, its fifth week of declines, capping the longest stretch of weekly losses since 2008, after the Group of 20 nations warned the European debt crisis still threatens global growth.
The Hang Seng China Enterprise Index (HSCEI) of Chinese companies in Hong Kong tumbled 2.2 percent, the most since March 6. China Mobile Ltd. (941), the world’s biggest phone carrier by users, fell 3 percent, the sharpest loss since October, after net income missed analyst estimates.
“Investors remain cautious as recent data continue to show that more actions are needed to boost economic growth in China,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. “Share prices can’t continue to move higher on weak earnings.”
The Shanghai Composite Index (SHCOMP) slipped 0.8 percent. The BSE India Sensitive Index, or Sensex (SENSEX), fell 1.6 percent and Taiwan’s Taiex Index (TWSE) slid 0.3 percent. South Korea’s Kospi Index dropped 0.1 percent.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose four basis points, or 0.04 percentage point, to 358, according to JPMorgan Chase & Co.’s EMBI Global Index.
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