Emerging-market stocks capped the longest weekly slide in a year as Brazilian shares slumped to a 20-month low after the nation’s credit outlook was cut by Standard & Poor’s. Turkish (XU100) equities trimmed this week’s plunge.
Brazil’s Ibovespa fell to the lowest level since October 2011, extending a decline from this year’s peak to 18 percent, as Petroleo Brasileiro SA drove commodity shares down. Samsung Electronics (005930) Co., the world’s largest smartphone maker, tumbled 6.2 percent in Seoul as JPMorgan Chase & Co. cut its profit estimates. Turkish stocks rallied on speculation the worst weekly retreat since 2011 was overdone. Poland’s zloty strengthened the most in almost a year versus the euro.
The MSCI Emerging Markets Index lost 0.4 percent to 980.64, extending its weekly drop to 2.8 percent. The gauge fell a fourth week. S&P lowered the outlook on Brazil’s BBB rating, which is in line with Mexico’s and Russia’s, citing concern over sluggish economic growth. Stocks briefly pared losses as data showed employment in America rose more than forecast.
“The emerging markets growth model is coming into question,” Burt White, chief investment officer who helps oversee $247 billion at LPL Financial in Boston, said in a phone interview. “What the market is looking at in Brazil is the fact that growth is probably continuing to be not as robust as people thought.” The U.S. jobs report was “not too hot, not too cold. It was just what we needed,” he said.
Technology shares led losses in a measure of developing-nation stocks among 10 groups, slumping 2 percent. The broad gauge extended this year’s drop to 7.1 percent, compared with an 9.8 percent jump in the MSCI World Index.
The iShares MSCI Emerging Markets Index exchange-traded fund slid 0.5 percent to $40.69. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, fell 2.1 percent to 24.32.
Brazil’s Ibovespa (IBOV) slumped 2.4 percent, extending this week’s decline to 3.5 percent. The measure has slumped 15 percent this year amid concern accelerating inflation may curb the economic recovery and the government’s interventionist policies will hurt corporate profits. Petrobras, as Petroleo Brasileiro is known, fell 3.2 percent.
Russian shares capped the biggest advance in three weeks led by OAO Mechel, which climbed from a four-year low, as oil rallied for the fourth time in five days. The ruble-based Micex Index added 2.1 percent, the most since May 17.
The Borsa Istanbul Stock Exchange National 100 Index climbed from a six-month low. Prime Minister Recep Tayyip Erdogan said he was ready to listen to the demands of anti-government protesters. The lira strengthened for the first time in three days and bonds gained. Lenders Turkiye Garanti Bankasi AS (GARAN) and Akbank T.A.S. added at least 3.2 percent.
The zloty strengthened from a one-year low reached yesterday as Poland’s central bank sold foreign currencies on the market. The rand pared its first weekly gain in five on bets investors in South Africa’s renewable-energy program are hedging the costs of importing machinery.
South Korea’s benchmark Kospi Index posted the biggest loss in almost a year. Samsung Electronics, the country’s most valuable company fell the most since August 2012. The won completed its first weekly gain in five amid a surging yen.
The Shanghai Composite Index fell 1.4 percent as economists forecast data tomorrow will show export growth slowed. The Hang Seng China Enterprises Index dropped an eighth day. China’s financial markets will be shut from June 10 to June 12 for the Dragon Boat Festival. The Jakarta Composite index capped the steepest drop in a year. Indian shares fell for a second day as the rupee’s drop to a one-year low spurred concerns overseas funds will pare holdings of local shares.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries slid 10 basis points to 309 basis points, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.