Emerging-market stocks dropped to the lowest level in almost five months as Apple Inc. (AAPL)'s Asian suppliers retreated on speculation sales are slowing and concern grew that the global economy is faltering.
LG Display Co. (034220) slid the most in four months in Seoul after audio-chipmaker Cirrus Logic Inc. (CRUS) reported an inventory glut that suggests slowing iPhone sales. Jiangxi Copper Co. (358) sank 2.5 percent in Hong Kong, while Russia’s Micex Index reversed earlier gains, closing at the lowest level since June 25. Brazil’s Bovespa index rebounded from a nine-month low, as Gol Linhas Aereas Inteligentes SA jumped 11 percent.
The MSCI Emerging Markets Index fell 0.4 percent to 997.33 in New York, the lowest level since Nov. 28. Stocks joined losses in the U.S. equity market as data on leading economic indicators and Philadelphia-area manufacturing trailed estimates. Earlier this week, the International Monetary Fund trimmed its global growth forecast.
“It’s global, very much like a cold that seems to be going around,” Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $380 billion, said by phone. “Earlier in the year, the macro data was on a more reliably upward trajectory. Now there appears to be a moderation going on.”
A gauge of technology shares in the MSCI Emerging Markets Index fell 1.4 percent, the most among 10 groups. The emerging- markets index has lost 5.5 percent this year, trailing a 5.6 percent increase in the MSCI World Index of developed-country stocks. The emerging-markets measure trades at 10.5 times 12- month projected profit, compared with the MSCI World’s 13.7 valuation, according to data compiled by Bloomberg.
The iShares MSCI Emerging Markets Index (MXEF) exchange-traded fund was little changed at $41.05. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, jumped 3.3 percent to 23.20.
Brazil’s Bovespa rose 0.5 percent and swap rates tumbled after the central bank raised benchmark borrowing costs yesterday less than some analysts had forecast, spurring speculation that monetary tightening will be limited. Gol surged the most since Dec. 26 on speculation a reduction in fuel taxes will help reduce costs. Mexico’s IPC Index fell 0.4 percent to a one-month low.
Russia’s Micex measure closed little changed after climbing as much as 1.1 percent earlier today. Fertilizer producer OAO PhosAgro jumped 2.8 percent, ending a eight-day slide, following an offer to buy shares of OAO Apatit.
Benchmark gauges in Turkey, Poland and Hungary retreated. The Czech Republic’s PX index slid for a fifth day to the lowest level since Aug. 14.
South Korea’s Kospi Index declined 1.2 percent to an almost five-month low as foreign funds sold $3.8 billion more equities than they bought this year through yesterday, exchange data show. LG Display, which supplies touch screens for Apple’s iPhone and iPad, dropped 4.8 percent. Hon Hai Precision Industry Co., which assembles Apple’s iPhone, fell 1.3 percent in Taipei to the lowest level since Aug. 3.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong slid 0.3 percent while the Shanghai Composite Index rose 0.2 percent. India’s S&P BSE Sensex (SENSEX) gained 1.5 percent. Jiangxi Copper capped its sixth day of declines.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 297 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.