Emerging Stocks Decline as Gazprom Drops, Ibovespa Retreats

Emerging-market stocks fell for the first time in three days as OAO Gazprom dropped, and Thai equities tumbled amid political turmoil. Brazil’s Ibovespa sank to a three-week low as commodity producers sank.

The MSCI Emerging Markets Index slid 0.5 percent to 1,030.03. Gazprom retreated 2.3 percent, halting its longest rally since at least 2006, as a visit to China by Russian President Vladimir Putin failed to produce a gas-supply deal. Airports of Thailand Pcl slumped 3.6 percent, the most in four months, and the SET Index (SET) declined after the army imposed martial law.

Dubai’s DFM General Index lost 4.1 percent as investors bet the gauge’s 38 percent gain this year was excessive after the United Arab Emirates was upgraded by MSCI Inc. to emerging-markets status. The Jakarta Composite Index (JCI) fell 2.4 percent after presidential frontrunner Joko Widodo’s main opponent formed a surprise coalition for July elections.

“There is some profit taking in Indonesia because the presidential election might be tougher than expected, and the political crisis in Thailand continues affecting the stocks,” Hertta Alava, head of emerging markets at FIM Asset Management Ltd. in Helsinki, said by e-mail. Investors may be selling Dubai stocks after they rallied prior to the MSCI upgrade, she said.

Dubai’s benchmark gauge tumbled the most among 93 global equity indexes tracked by Bloomberg, to the lowest in a month. MSCI Inc. last week named the Dubai companies it will include in its developing-markets gauge from June 1.

Brazilian Stocks

The emerging-market index has risen 2.7 percent this year and trades at 10.7 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index of developed markets has gained 1.2 percent in 2014 and is valued at a multiple of 14.1.

The Ibovespa gained fell 1.8 percent today as mining company MMX Mineracao e Metalicos SA led a decline in raw-material exporters, sinking 8.3 percent.

The SET Index lost 1.1 percent. The baht fell 0.2 percent, paring earlier losses on speculation the central bank will intervene in the currency market, according to Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp.

The move to impose martial law is not a coup and people should not be concerned, Army Chief Prayuth Chan-Ocha said on local television, asking political groups to end protests that began in November and led to Prime Minister Yingluck Shinawatra’s ouster on May 7.

Gazprom

PT Telekomunikasi Indonesia sank 5.8 percent after Goldman Sachs Group Inc. cut the stock’s rating. The Jakarta Composite Index fell 2.4 percent. Indonesian presidential candidate Prabowo Subianto formed a coalition with Golkar, the country’s second-biggest party, complicating the task for frontrunner Widodo if he wins the July 9 presidential vote.

Gazprom, the world’s largest natural-gas producer, ended a nine-day rally, dropping 1.8 percent in Moscow. The Micex Index climbed 0.4 percent. The ruble added 0.1 percent against the dollar.

The S&P BSE Sensex index climbed 0.1 percent in its fourth day of gains. The gauge has advanced after the Bharatiya Janata Party and its allies secured the largest victory in 30 years, placing BJP leader Narendra Modi in a position to pursue economic reforms.

Poland’s WIG30 Index advanced 0.3 percent, while the FTSE/JSE Africa All-Share Index climbed 0.2 percent in Johannesburg.

Nine out of 10 industry groups in the developing-nation measure fell. A gauge of technology companies added 0.7 percent. Infosys Ltd. jumped 3.6 percent.

The Hang Seng China Enterprises Index (HSCEI) lost 0.3 percent, its fourth day of declines. The Shanghai Composite Index (SHCOMP) rose 0.2 percent as real estate stocks gained on easing concern that new share sales will divert funds after the government announced fewer initial public offerings than some analysts had estimated.

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To contact the reporters on this story: Ian Sayson in Manila at isayson@bloomberg.net; Lyubov Pronina in London at lpronina@bloomberg.net

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

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