Emerging-market stocks fell for a ninth day, capping the longest slide since 2006, as Petroleo Brasileiro SA joined a slump in energy producers. India’s rupee sank to an eight-week low to lead declines in currencies.
The MSCI Emerging Markets Index dropped 0.2 percent to 991.45. Petrobras, as the Brazilian state-run oil company is known, drove the Ibovespa to the biggest loss among the major equity indexes in the Americas. Indian (SENSEX) stocks fell for a sixth day as the rupee weakened before a report that economists forecast will show inflation accelerated last month. The iShares China Large-Cap ETF slipped in New York as a Communist Party meeting failed to unveil detailed policy shifts.
Energy shares joined a slump in crude oil amid forecasts that U.S. inventories rose to the most since June. Federal Reserve Bank of Atlanta President Dennis Lockhart told Bloomberg Radio that a reduction in central bank bond purchases “could very well take place” next month. The Federal Open Market Committee at a March 18-19 meeting will probably taper its bond buying to $70 billion, according to the median of 32 economist estimates in a Bloomberg News survey Nov. 8.
“The market is feeling vulnerable towards a taper, not if, but when,” Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees more than $1 trillion of assets, said in a telephone interview today. “That when could be sooner than consensus estimates, even though March is the consensus.”
Eight of 10 groups in the MSCI Emerging Markets Index dropped today, led by commodity shares. The broad measure trades at 10.6 times projected earnings, compared with the valuation of 14.3 for the MSCI World Index.
The iShares MSCI Emerging Markets Index exchange-traded fund declined 0.5 percent to $40.73. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, retreated 0.1 percent to 23.45.
Brazil’s Ibovespa retreated 1.6 percent as Petrobras dropped to the lowest level since Oct. 25. Banco do Brasil SA tumbled after cutting its estimate for interest earnings. OSX Brasil SA, the shipbuilding and oil services company controlled by former billionaire Eike Batista, surged after saying it would seek to sell assets under bankruptcy protection.
Russian stocks increased the most in three weeks as OAO Sberbank, the nation’s biggest lender, rallied on plans to double profit in the next five years. OAO Gazprom climbed from a one-month low as JPMorgan Chase & Co. raised Russia’s natural gas export monopoly to the equivalent of buy, citing prospects for a Chinese deal and dividends.
India’s S&P BSE Sensex lost 1 percent as Tata Motors Ltd. (TTMT), owner of Jaguar Land Rover, declined to a one-month low. ICICI Bank Ltd. (ICICIBC) fell 2.4 percent. The rupee retreated 0.7 percent to 63.6950 per dollar, the weakest level since Sept. 10.
China’s stocks rose the most in almost two weeks, led by consumer staples and financial shares, before the conclusion of a four-day Communist Party meeting. Kweichow Moutai Co. (600519), China’s biggest liquor maker, climbed 3.8 percent after it announced plans to buy property in France to expand its business. Cosco Shipping Co. (600428) paced gains for shippers.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slipped 0.9 percent to $36.90. China elevated the role of markets in the nation’s economic strategy while stopping short for now of unveiling detailed policy shifts, after President Xi Jinping oversaw a gathering of Communist Party leaders in Beijing.
The premium investors demand to own emerging-market debt over U.S. Treasuries rose four basis points, or 0.04 percentage point, to 330 basis points, according to JPMorgan Chase & Co.
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