Emerging Stocks Drop to Seven-Week Low After China Services Data

Emerging-market stocks fell, dragging down the benchmark index to a seven-week low, and currencies weakened after Chinese service industries data fueled concern the world’s second-biggest economy is slowing.

Industrial & Commercial Bank of China Ltd. (601398) led a 2.7 percent slump in the Hang Seng China Enterprises Index (HSCEI) in Hong Kong. Hyundai Mipo Dockyard Co. slid the most since October in Seoul after forecasting lower orders. Indonesia’s rupiah, South Korea’s won and the Philippine peso sank at least 0.4 percent versus the dollar.

The MSCI Emerging Markets Index lost 0.9 percent to 981.50 as of 1:44 p.m. in Hong Kong, poised for the lowest level since Nov. 13. The measure is heading for a 1.6 percent loss this week, the worst since Nov. 8. China’s non-manufacturing gauge fell to a four-month low in December, after data earlier this week showed two measures of factory output declined. Federal Reserve Chairman Ben S. Bernanke is scheduled to speak later today at an economics conference in Philadelphia.

“This weakness could prompt investors to stay on the sidelines as they wait for more signs over the strength of the global economic recovery,” Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc., said today.

The MSCI Emerging Markets Index lost 5 percent last year and trades at 10.3 times its 12-month projected earnings, data compiled by Bloomberg show. The MSCI World Index rallied 24 percent and is valued at a multiple of 14.7.

ICBC Slides

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong fell for a second day, poised for the lowest close since Nov. 14. ICBC, China’s biggest lender, slid 2.3 percent to a four-month low. The Shanghai Composite Index sank 1.5 percent.

The non-manufacturing Purchasing Managers’ Index fell to 54.6 in December from 56 in November, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said today. A reading above 50 signals expansion.

Chinese shares also dropped on concern investors are withdrawing money before new share sales. Five companies were approved to sell initial public offering shares, according to exchange statements, adding up to 16 already endorsed.

All 10 industry groups in the MSCI emerging measure decreased, led by industrial and technology stocks. Hyundai Mipo (010620) fell 4.5 percent. The company said it expects to win orders valued at $3.5 billion this year, compared with $5.94 billion of contracts in 2013.

Samsung Slumps

Samsung Electronics Co., the world’s biggest maker of smartphones and televisions, fell 1.5 percent in Seoul, extending yesterday’s 4.6 percent slump. The shares will be weak in the short term due to concerns over a strengthening won and earnings growth, Shinhan Investment Corp. wrote in a report.

South Korea’s Kospi index sank 1.2 percent, heading for the lowest close since Sept. 4. The won pared a weekly gain as concern grew that the authorities will act to protect exporters after the currency rallied to the strongest level against the dollar in more than 29 months yesterday.

The rupiah weakened the most since Dec. 13, while Malaysia’s ringgit fell 0.3 percent. The peso weakened 0.4 percent, heading for its lowest level since Aug. 29.

Thailand’s SET Index dropped 0.7 percent, paring earlier losses of as much as 1.8 percent. The worst start to a year for Thai stocks since at least 1988 spurred Aberdeen Asset Management Plc to buy after valuations fell to the lowest levels in 18 months.

The SET Index tumbled 5.2 percent yesterday amid concern that prolonged political unrest will curb economic growth. That left the measure valued at 10.8 times earnings estimates for the next 12 months, the cheapest since June 2012, data compiled by Bloomberg show.

The Jakarta Composite Index lost 1.2 percent, while gauges in Malaysia and Taiwan slid at least 0.7 percent.

Celltrion Inc. (068270) jumped 6.4 percent in Seoul, the second-largest gain in the MSCI Emerging Markets Index. The company said yesterday that its largest shareholder is in talks to sell its stake to potential buyers.

To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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