Emerging-market stocks fell for a second day as automakers tumbled and companies from Bharat Heavy Electricals Ltd. to Petroleo Brasileiro SA reported disappointing results.
The MSCI Emerging Markets Index lost less than 0.1 percent to 990.24 at the close of trading in New York, the lowest close since Sept. 13. Kia Motors Corp., South Korea’s second-biggest automaker, slid to a 14-month low after Daiwa Securities Group Inc. downgraded the stock and Honda Motor Co. cut its full-year profit forecast. Bharat, India’s largest maker of power-plant equipment, fell the most in nine months and Petrobras, Brazil’s state-run oil company, had its biggest drop since July. Russia’s Micex slipped for a fifth day as oil retreated.
More than 59 percent of companies in the developing markets gauge that reported quarterly earnings this month have missed analysts’ estimates, according to data compiled by Bloomberg. Equity trading volumes in Asia slumped as Hurricane Sandy approached New York City, prompting America’s securities industry to shut U.S. stock markets today.
“There’s no big momentum investors can lean on for the moment,” Chung Yun Sik, chief investment officer for equities at ING Investment Management Korea Ltd., which oversees about $19 billion, said by phone in Seoul. “We’re seeing directionless trade depending on earnings results. Even after earnings estimates by analysts had already been lowered, we have seen more negative surprises.”
The number of shares changing hands on Russia’s Micex was 40 percent below the 30-day average for the index, according to data compiled by Bloomberg. About 24 percent fewer shares of Shanghai Composite Index companies changed hands, and trading volumes were 39 percent lower versus the average for the Kospi and 21 percent for the FTSE Bursa Malaysia KLCI Index, the data show.
The Ukrainian Equities Index jumped 6.2 percent after President Viktor Yanukovych’s ruling party won more votes than its rivals in parliamentary elections.
Brazil’s Bovespa index slipped 0.2 percent and Russia’s Micex dropped 0.1 percent. The Shanghai Composite Index lost 0.4 percent, while the Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong rose 0.9 percent. The BSE India Sensitive Index added less than 0.1 percent.
Argentine bonds posted their biggest two-day plunge in four years as JPMorgan Chase & Co., Bank of America Corp., and Barclays Plc cut their recommendations on the debt following a U.S. court decision favoring holders of defaulted securities. Yields on the government’s bonds due 2033 rose 12.85 percent, after sinking a record 10 cents on Oct. 26, according to pricing provided by JPMorgan.
China’s yuan advanced, touching a 19-year high of 6.2371 per dollar, as signs the world’s second-largest economy is recovering from a seven-quarter slowdown lured foreign funds. The Hungarian forint had the biggest two-day drop in two months on concern Hungary won’t obtain aid from the International Monetary Fund and the European Union. The forint fell 1 percent against the euro, extending its two-day decline to 1.8 percent.
The MSCI Emerging Markets Index has dropped 26 percent from its all-time high five years ago on Oct. 29, 2007. The emerging-market gauge trades at 11.4 times estimated earnings, compared with a multiple of 13.1 times for the MSCI World Index, according to data compiled by Bloomberg.
The developing-nations gauge has lost 1.2 percent in October, set for its biggest monthly decline since May. The index fell 1.5 percent last week amid concerns over economic growth and corporate earnings.
A gauge of consumer-discretionary companies led declines among 10 industry groups in the MSCI Emerging Markets Index, falling by 0.9 percent to the lowest level since Sept. 13. Kia sank 4 percent in Seoul after Daiwa cut its stock rating to hold from outperform. The automaker extended a 5.6 percent slump on Oct. 26 after it posted profit that missed analysts’ estimates.
Bharat Heavy slumped 6.4 percent, the most since January, after reporting second-quarter profit of 12.7 billion rupees ($235 million), less than the 13.6 billion rupees estimated by analysts.
Petrobras slid 3.4 percent, the most since July 31. Net income declined to 5.57 billion reais ($2.7 billion), or 43 centavos a share. The company was expected to report adjusted profit of 58 centavos a share, the average estimate of seven analysts in a Bloomberg survey.
M. Dias Branco SA, a Brazilian maker of cookies and pasta, fell 1.4 percent, reversing two days of gains, after posting third-quarter adjusted net income of 114.3 million reais, which compares with the average estimate of 120 million reais in a Bloomberg survey of four analysts.
CCX Carvao da Colombia SA, the coal company controlled by Brazilian billionaire Eike Batista, fell 5.6 percent to a record low after the company said in a regulatory filing on Oct. 26. that Chief Executive Officer Leonardo Moretzsohn had resigned.
United Spirits Ltd., the Indian whiskey maker controlled by Vijay Mallya, fell 9 percent, the most in eight months on speculation that discussions to sell a stake to Diageo Plc may fall through.
Tongaat Hulett Ltd. retreated 4.6 percent, the most in 16 months, after Zimbabwe’s government gave the South African sugar producer company 14 days to submit a plan to sell a majority stake in its local operations.
Yanzhou Coal Mining Co. slumped to a one-month low in Hong Kong after posting a quarterly loss, retreating 5 percent. The company reported a net loss of 79.6 million yuan ($12.7 million), compared with a 1.08 billion yuan profit a year earlier.
HTC Corp., Asia’s second-largest smartphone maker, tumbled by the daily limit of 7 percent in Taipei, after saying revenue this quarter will be about NT$60 billion ($2.1 billion). That’s less than the NT$74.6 billion average of 24 analyst estimates compiled by Bloomberg. The stock was the second-worst performer in the MSCI Emerging Markets Index after United Spirits.
The extra yield investors demand to own emerging market debt over U.S. Treasuries rose four basis points, or 0.04 percent, to 292 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.