Most emerging-market stocks advanced as Chinese lenders gained after the central bank added money to the financial system. OAO Uralkali, the world’s largest potash producer, posted the biggest decline since 2008.
More than 400 shares rose and 357 retreated in the MSCI Emerging Markets Index, which lost less than 0.1 percent to 953.65. Citic Securities Co. gained 2 percent in Shanghai, while Turkiye Halk Bankasi AS (HALKB) jumped 2.8 percent in Istanbul after being named a top pick by Citigroup Inc. Uralkali tumbled 19 percent in Moscow after saying the end of its trading agreement with competitor Belaruskali may trigger a 25 percent plunge in potash prices. Brazil’s real sank to a four-year low.
Stocks in developing nations climbed 1.4 percent in July, poised for the steepest monthly increase since December. China’s central bank conducted reverse-repurchase operations for the first time in five months, helping alleviate a cash squeeze that drove the benchmark interbank lending rate to a four-week high. U.S. policy makers are meeting today and tomorrow.
“People are still trying to figure out the China puzzle,” Michael Holland, who oversees more than $4 billion as chairman of Holland & Co., said in a phone interview from New York. “It looks like the Chinese authorities are doing enough to satisfy people that were optimistic we weren’t going to have a hard landing. And there’s no question the Fed meeting is front and center around the world.”
Consumer discretionary shares led gains among 10 groups in the MSCI Emerging Markets Index, while commodity companies retreated. The broad measure has slumped 9.6 percent this year, compared with a 13 percent jump in the MSCI World Index. The developing-nation gauge trades at 10 times projected earnings, lower than the MSCI World’s valuation of 13.8, according to data compiled by Bloomberg.
The iShares MSCI Emerging Markets Index exchange-traded fund slid 0.2 percent to $39.24. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, added 0.6 percent to 23.21.
Brazil’s Ibovespa (IBOV) fell for a second day as steelmaker Usinas Siderurgicas de Minas Gerais SA led commodity producers lower. The real declined 0.6 percent to 2.2825 per U.S. dollar, the weakest closing level since March 2009.
The Micex Index lost 0.8 percent as Uralkali slumped as much as 25 percent, leading the Moscow Exchange to halt its trading. OAO Acron, a Russian fertilizer producer, tumbled 9.8 percent, while OAO PhosAgro, Europe’s largest phosphate-fertilizer producer, retreated 8 percent.
The Borsa Istanbul Stock Exchange National 100 Index jumped 2 percent after Citigroup said in an e-mailed note today that it’s “more bullish” on banks given valuations after a recent selloff. The lira gained as Central Bank Governor Erdem Basci said the currency is “far” from being overvalued. Benchmark stock gauges in the Czech Republic, Hungary and Poland advanced.
The Shanghai Composite Index (SHCOMP) rose for the first time in five days, adding 0.7 percent, while the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong added 0.3 percent. Citic Securities helped drive the biggest gain in a week for a measure of financial shares.
Indian stocks retreated, with the benchmark index posting its longest losing streak in almost four months, after the central bank cut its growth forecast and kept interest rates unchanged. The rupee slid 1.8 percent.
The premium investors demand to own emerging-market debt over U.S. Treasuries fell one basis point, or 0.01 percentage point, to 315 basis points, according to JPMorgan Chase & Co.
To contact the editor responsible for this story: Tal Barak Harif at firstname.lastname@example.org