Emerging Stocks Trim Weekly Advance on India Drop as Lira Slumps

Emerging-market stocks fell, trimming the first weekly gain this month, as India’s most-valuable company missed sales estimates and China resumed initial public offerings. Turkey’s lira slumped to a record.

Tata Consultancy Services Ltd., India’s largest software-services exporter, slid 5.8 percent in Mumbai. The Shanghai Composite Index retreated 0.9 percent while Neway Valve (Suzhou) Co. surged 43 percent in its debut as China ended a 15-month freeze on new share sales. The lira weakened 1.2 percent against the dollar and the Borsa Istanbul 100 Index (XU100) fell to a three-week low. The Ibovespa posted a third straight weekly decline as homebuilders fell.

The MSCI Emerging Markets Index slipped 0.2 percent to 972.27 in New York, paring the weekly gain to 0.2 percent. Tata Consultancy was the biggest drag on the gauge after its results pulled the S&P BSE Sensex Index down the most since Jan. 2. Better-than-expected U.S. retail sales data this week and a drop in initial jobless claims backed the case for less monetary stimulus from the Federal Reserve.

“I expect Fed tapering to continue to pressure EM currencies and equities,” Michael Wang, an emerging-markets strategist at Amiya Capital LLP in London, said by e-mail. Gains this week in developing-country assets represented a “temporary reprieve,” he said.

Measures tracking financial and consumer discretionary companies in the MSCI index retreated, while energy stocks climbed.

Turkish Inflation

Equity indexes in Poland and Hungary lost at least 1 percent, while the Borsa Istanbul decreased 1.8 percent to the weakest level since Dec. 27. Koc Holding AS dropped 3.3 percent to the lowest level this year.

Turkish stocks have fallen 12 percent since an official graft probe came to light on Dec. 17. The lira, the worst performer among developing-nation currencies in the period, weakened to a record 2.2364 per dollar today. Inflation will accelerate to 7.44 percent at the end of 2014, up from 7.4 percent at the close of last year, according to the central bank’s January survey of expectations from economists and executives published today.

The Ibovespa sank 1 percent after a report showing Brazil’s economic activity contracted in November pushed homebuilders lower. Brookfield Incorporacoes SA (BISA3) slipped 2.8 percent while Gafisa SA fell 2 percent. Retailer Lojas Americanas SA dropped to the lowest since August.

Russia’s ruble fell for a fifth day, losing 0.5 percent to 33.59 per dollar. The Micex Index advanced 0.4 percent in Moscow as West Texas Intermediate crude rose to a two-week high on signs that economic growth is accelerating in the U.S., the world’s biggest oil-consuming nation. Oil and gas account for about two-thirds of Russia’s exports and about half of budget revenue.

Cheaper Valuations

The Shanghai Composite fell to the lowest level since July. Neway Valve’s surge prompted the Shanghai Stock Exchange to say it will watch closely for speculation in newly listed stocks.

The MSCI Emerging Markets Index has slid 9.4 percent in the past 12 months, compared with a 20 percent jump for the MSCI World Index. That’s pushed valuations versus advanced-nation equities to the lowest level in almost a decade.

“Emerging-market shares have been underperforming lately, luring more investors who look at valuations,” Han Sang Soo, a money manager at Samsung Asset Management Co., which oversees about $121 billion, said by phone from Seoul.

Vietnam’s VN Index (VNINDEX) was the biggest gainer among emerging-market peers today, adding 1.9 percent and extending its longest winning streak in a year. Foreign investors bought a net $35 million of shares this week, the most in more than 11 months, data compiled by Bloomberg show.

Thailand Turmoil

South Africa’s rand strengthened 0.2 percent from its weakest level versus the dollar since the 2008 financial crisis, while the South Korean won gained 0.4 percent.

Thailand’s SET Index (SET) declined 0.5 percent after a homemade explosive device was thrown at a group of anti-government protesters marching in Bangkok. Twenty-eight people were injured, according to the Erawan Emergency Medical Center’s website.

The premium investors demand to own emerging-market debt over U.S. Treasuries was little changed at 315, according to JPMorgan Chase & Co. indexes.

To contact the reporters on this story: Sharon Cho in Seoul at ccho28@bloomberg.net; Lyubov Pronina in London at lpronina@bloomberg.net

To contact the editors responsible for this story: Daliah Merzaban at dmerzaban@bloomberg.net; Michael Patterson at mpatterson10@bloomberg.net

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