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Emerging Stocks Cap Biggest Weekly Drop Since May on U.S.

Emerging-market stocks capped their biggest weekly slump since May as a gauge of American consumer sentiment unexpectedly dropped and Samsung Electronics (005930) Co. led declines in technology shares in Asia.

Samsung Electronics sank the most in six weeks in Seoul as the world’s biggest smartphone seller unveiled its Galaxy S4. BYD Co. tumbled 7.8 percent in Hong Kong as two people with knowledge of the matter said the company plans to sell new shares. Brazil’s Bovespa Index (IBOV) slumped as MRV Engenharia & Participacoes SA led homebuilders lower. Colombia’s peso weakened after President Juan Manuel Santos asked central bankers to find new ways to ease the currency’s gains.

The MSCI Emerging Markets Index slid 0.5 percent to 1,042.24 in New York, dropping a fifth day. The gauge extended its weekly decline to 2.2 percent. Stocks joined a slump in American shares as a measure of U.S. consumer confidence dropped to the lowest level since December 2011.

“On a risk-off day in the U.S., emerging markets act in line,” Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC said in a telephone interview. His firm manages $55 billion.

Nine out of 10 groups in the in the MSCI Emerging Markets Index retreated as phone and technology companies had the biggest losses. The broader measure has slipped 1.2 percent this year and trades at 10.9 times estimated 12-month earnings, according to data compiled by Bloomberg. That compares with a multiple of 14.3 for the MSCI World Index (MXEF) of developed-nation shares, which has climbed 7.9 percent in 2013.

Emerging ETF

The iShares MSCI Emerging Markets ETF slipped 0.9 percent to $42.77 in New York, extending its loss for the week to 3.1 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a gauge of options prices on the fund and expectations of price swings, fell 0.9 percent to 15.97.

Brazil’s Bovespa lost 0.7 percent, dropping a fourth day. MRV sank 8.1 percent after posting earnings that trailed analysts’ projections for a fifth quarter.

Colombia’s peso dropped 0.4 percent against the U.S. dollar. The peso gained 9.7 percent in 2012 and touched a 17- month high on Jan. 2, prompting policy makers to increase dollar purchases in the foreign-exchange market.

The Micex Index (INDEXCF) retreated 0.3 percent as Russia left borrowing costs unchanged for a sixth month. VTB Group erased gains and fell less than 0.1 percent. Russia’s second-biggest lender may sell shares before “autumn” 2013, First Deputy Prime Minister Igor Shuvalov said today in St. Petersburg.

Asian Market

The Shanghai Composite Index rose 0.4 percent, extending gains for a second day. Hong Kong’s Hang Seng Index fell 0.4 percent, posting its first weekly decline in three weeks as developers retreated after banks raised mortgage rates.

Samsung Electronics declined 2.6 percent, the most since Jan. 28. The company, which unveiled the Galaxy S4 at New York’s Radio City Music Hall yesterday, dragged South Korea’s Kospi index down 0.8 percent to a three-week low.

BYD, the Chinese automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc., slid the most in a year. The company plans to sell new shares equivalent to as much as 20 percent of its Hong Kong-traded stock, said two people with knowledge of the matter.

Chinese equities sank to the lowest level since November in New York after the nation’s new leaders failed to announce specific policy measures to stoke growth in Asia’s largest economy. NetEase Inc. (NTES) slid the most since December after Chinese state television said the Internet company collects users’ private information.

The extra yield investors demand to own emerging-market bonds over U.S. Treasuries rose 3 basis points, or 0.03 percentage point, to 286 basis points, according to JPMorgan Chase & Co’s EMBI Global Index.

To contact the reporters on this story: Lyubov Pronina in London at lpronina@bloomberg.net; Leslie Picker in New York at lpicker2@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net

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