Most emerging-market stocks fell after the benchmark index delivered the biggest weekly gain in a month on concern the global economic slowdown is eroding corporate earnings.
The MSCI Emerging Markets Index (MXEF) gained 0.1 percent to 1,007.31 at the close of trading in New York as 393 of the 818 shares in the measure declined. Brazil’s Bovespa Index retreated for a third day and South Korea’s Kospi gauge dropped to the lowest in a week. The Shanghai Composite Index (SHCOMP) advanced to the highest level in a month as shipbuilder China Rongsheng Heavy Industries Group Holdings Ltd. (1101) jumped the most in a year in Hong Kong.
Banco Bradesco SA (BBDC4), Latin America’s second-largest bank, fell the most in more than a week after its profit missed estimates. South Korea’s Kumho Petro Chemical Co. (011780) slid the most in two weeks, leading materials stocks lower, after saying that third-quarter operating profit dropped 76 percent. A report showed Japan’s exports slid 10.3 percent in September from a year earlier, the biggest drop since the aftermath of last year’s earthquake.
“We’re seeing volatile trades as some corporate earnings and economic data disappoint,” Chu Moon Sung, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $30 billion, said by phone.
The 21 nations in MSCI’s developing-nations gauge send about 13 percent of their exports to the U.S. and 30 percent to the European Union on average, according to data compiled by the World Trade Organization.
Brazil’s Bovespa index fell 0.4 percent, while Mexico’s IPC benchmark lost 0.6 percent. Russia’s Micex Index increased 1 percent and India’s BSE India Sensitive Index gained 0.6 percent. The Kospi Index retreated 0.1 percent.
The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, rose 1 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, gained 0.8 percent.
Banco Bradesco lost 1.9 percent after reporting adjusted net income of 0.76 reais (38 cents) a share, less than the 0.77- real per-share median estimate of six analysts surveyed by Bloomberg. Card-payment processor Cielo SA fell 4.9 percent to the lowest since Feb. 15 after newspaper O Estado de S. Paulo reported that President Dilma Rousseff is seeking to reduce transaction fees.
The emerging market index has climbed 9.9 percent this year, trailing a 12 percent increase by the MSCI World (MXWO) Index of developed countries. The developing-markets gauge trades at 11.6 times estimated earnings, compared with the MSCI global index’s multiple of 13.3, data compiled by Bloomberg show.
Industrial stocks led declines on the benchmark index, falling 0.3 percent. Consumer discretionary and material stocks also fell. Kumho Petro Chemical fell 2.9 percent in Seoul. The S&P GSCI Spot Index fell 1.2 percent as nickel and lead retreated, and crude declined to a two-week low.
OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, contributed the most to the Bovespa’s decline, falling 4.2 percent.
OAO Rosneft climbed 2.6 percent to the highest since March 15 in Moscow after the company agreed to buy TNK-BP, a 50-50 venture between BP Plc and a group of billionaires, for $54.8 billion in the third-biggest oil acquisition ever.
Chinese stocks climbed in Shanghai and Hong Kong on prospects policy makers will act to stimulate the market before next month’s leadership transition. Reports last week showed that growth in industrial production, retail sales and fixed- asset investment in the world’s second-largest economy quickened in September, signaling China’s recovery may be gaining traction.
China’s Shanghai Composite Index added 0.2 percent to the highest level since Sept. 10. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong gained 0.6 percent to its highest since May.
“It’s beginning to feel better,” Eric Conrads, who helps manage $1 billion of stocks at ING Groep NV in New York, said by phone today. “China has stabilized, which bodes well for assets in the fourth quarter.”
Rongsheng, China’s biggest shipbuilder outside state control, surged 14 percent in Hong Kong after receiving a tender-barge order that is the company’s first in the offshore- engineering sector. The shipbuilder has also hired Don Lee, a former Sembcorp Marine Ltd. executive, and formed a dedicated offshore unit in Singapore as it seeks orders from energy companies to offset waning demand for dry-bulk ships.
Kuwait’s Stock Exchange Price Index (KWSEIDX) slumped 0.2 percent, extending a 3.1 percent retreat in the previous session after the government amended the electoral system, prompting calls by the opposition for more protests and a boycott of the elections.
India’s rupee led gains among emerging-market currencies tracked by Bloomberg, rising 0.7 percent versus the dollar. The Russian ruble weakened 0.7 percent, the worst performer.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell four basis points, or 0.04 percentage point, to 273, according to JPMorgan Chase & Co.’s EMBI Global Index.