Emerging ETF Erases Advance as Banks Lead Ibovespa Lower

The iShares MSCI Emerging Markets Index retreated, erasing an earlier advance, as lender Banco Bradesco SA led a slide in Brazil’s Ibovespa.

The exchange-traded fund dropped 0.3 percent to $41.30 at 4 p.m. in New York, after rallying 1.7 percent earlier. The MSCI Emerging Markets Index rose 0.2 percent to 1,002.04. The Ibovespa reversed an earlier increase as banks including Bradesco and Itau Unibanco Holding SA slumped more than 1.1 percent, while the real led gains in major currencies. China’s benchmark money-market rate had the worst week this year.

The ETF joined a decline in U.S. stocks as investors continued a selloff of the bull market’s biggest winners. Earlier today, it rallied after a report showing U.S. employers added fewer jobs than forecast in March eased concern the Federal Reserve would accelerate the unwinding of stimulus.

“We have to wait and see if growth picks up,”Walter “Bucky” Hellwig, a senior vice president at BB&T Wealth Management, said by phone from his office in Birmingham, Alabama. “We are yet to see if the U.S. economy has reached a self-sustained pace of growth.”

The Ibovespa fell as Bradesco led a slump in financial stocks amid speculation a three-week surge that pushed the benchmark index’s valuation to the highest since January was excessive. Itau contributed the most to the gauge’s decline. The real climbed as the central bank resumed auctions to extend maturities on swap contracts that support the currency.

Russian bonds advanced with the Micex Index and the ruble strengthened on investor optimism tensions over Ukraine are abating. Markets have been returning to levels seen before President Vladimir Putin’s decision to annex Ukraine’s Crimea region last month triggered a selloff in stocks and bonds.

‘Widely Known’

“Russia and those geopolitical concerns are widely known and much of that is built into prices,” Jeff Layman, chief investment officer of BKD Wealth Advisors in Springfield, Missouri, said in a telephone interview today. His firm has $2.4 billion under management.

Turkey’s Borsa Istanbul 100 Index rallied 1.5 percent as Prime Minister Recep Tayyip Erdogan urged the central bank to cut interest rates.

China’s stocks rose the most in a week, led by financial and technology companies, on speculation the government will support the economy. The seven-day repurchase rate, a gauge of funding availability in the banking system, tumbled as demand for cash eased after banks met quarter-end capital requirements.

India’s S&P BSE Sensex (SENSEX) declined for a second day as some investors judged recent gains to all-time highs as excessive. Tata Motors Ltd. (TTMT), the owner of Jaguar Land Rover, fell the most in two weeks.

The premium investors demand to own emerging-market debt over U.S. Treasuries rose 0.01 percentage point to 291 basis points, according to JPMorgan Chase & Co.

To contact the reporters on this story: Halia Pavliva in New York at hpavliva@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net

To contact the editors responsible for this story: Tal Barak Harif at tbarak@bloomberg.net Rita Nazareth, Daliah Merzaban

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