Technology stocks led declines among developing-nation equities as Samsung Electronics Co. sank to a two-month low after saying waning demand for smartphones and a stronger Korean won will cut earnings.
The MSCI Emerging Markets Information Technology Index slid 1.9 percent to the lowest level since Nov. 26 as Samsung, which has the biggest weighting on the gauge, dropped 3.2 percent in Seoul. China Cosco Holdings Inc., the nation’s largest shipping company, fell 5.1 percent in Hong Kong amid trading restrictions on its China shares after forecasting a 2012 loss. Turkey’s ISE National 100 index tumbled the most in more than a year, while Brazil’s Bovespa sank to a one-month low.
The MSCI Emerging Markets Index of developing-nation equities retreated 0.7 percent to 1,062.06 in New York. Samsung fell for a fourth day on the Kospi index after saying Jan. 25 that it expected “somewhat weaker” demand for smartphones this year amid market saturation in developed countries. Strength in the won, up 9.1 percent versus the dollar last year, may reduce operating profit by 3 trillion won ($2.8 billion) in 2013, the company said last week.
“It’s not a great day today, in Asia there’s clearly some concerns about the growth outlook,” Gaelle Blanchard, an emerging markets strategist at Societe Generale SA in London, said by phone. “There’s a run of risk aversion. The key thing is still concerns for growth, whatever the trigger.”
The iShares MSCI emerging markets ETF, which tracks developing-nation stocks including Samsung, dropped 0.7 percent to $43.85, the lowest close since Dec. 28. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, jumped 11 percent to 18.19.
Brazilian power producer Light SA fell 5.1 percent, boosting the 1.9 percent drop on the Bovespa index, amid renewed concern that lower electricity tariffs will hurt profits in the sector. President Dilma Rousseff said Jan. 23 that Brazil will cut power costs more than has been previously announced.
Pulp producer Fibria Celulose SA retreated 5.9 percent in Sao Paulo to lead declines in the MSCI Emerging Markets Materials Index.
Turkey’s benchmark gauge slipped 4.2 percent, the biggest drop since September 2011. Russia’s Micex Index added 1.2 percent as oil extended a seven-week advance after data showed U.S. durable goods climbed more than economists forecast in December.
The Shanghai Composite Index of domestic Chinese shares jumped 2.4 percent after a report showed that industrial company profits rose for a fourth month in December, adding to signs a rebound in the biggest emerging economy is gaining momentum.
The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. added 0.1 percent to 99.72 in New York. Youku Tudou Inc., owner of China’s most-used video websites, jumped to a seven-month high after Deutsche Bank AG rated it a new buy. Qihoo 360 Technology Co. Ltd., a Beijing-based Internet software developer, dropped after saying that its applications were removed from Apple Inc.’s iTunes store.
The Standard & Poor’s 500 Index fell 0.2 percent to 1,500.18 as a drop in pending home sales overshadowed an increase in durable-goods orders.
Anhui Conch Cement Co., China’s biggest cement maker, rose to a 16-month high in Hong Kong. Polyus Gold International Ltd., Russia’s largest miner of the metal, rose to highest close since April 19 in Moscow after saying output jumped 12 percent last year, exceeding the company’s target. PKN Orlen SA, Poland’s largest refiner, fell the most in three weeks after Erste Group Bank AG recommended selling the stock. Poland’s WIG20 index retreated 0.8 percent.
“It’s a mixed day, with China reacting strongly to a turn-around in earnings at the end of last year,” Martial Godet, head of strategy at BNP Paribas CIB in London, said by e-mail. “Earnings growth should globally be stronger than last year for emerging-market companies, in China in particular. Commodity and oil prices are resilient, which also helps Russia.”
Vietnam’s VN Index advanced 2.5 percent amid speculation regulators will ease foreign-ownership limits on some companies. South Korea’s Kospi index retreated 0.4 percent to the lowest level since Dec. 4.
South Korea’s won and the Taiwan dollar sank the most in 16 months as the yen’s slide to a 2 1/2-year low fanned speculation that their central banks will seek weaker exchange rates to protect exports. The rand declined for the first time in three days, weakening 1.8 percent, as foreigners reduced holdings of South African assets.
India’s rupee weakened 0.4 percent versus the dollar. The Reserve Bank of India will probably cut the nation’s benchmark rate by 25 basis points, or 0.25 percentage point, to 7.75 percent tomorrow, according to 25 of 29 analysts surveyed by Bloomberg. The central bank last reduced the rate by half a percentage point in April.
The Egyptian pound weakened 0.4 percent versus the dollar to a record-low. President Mohamed Mursi declared a state of emergency and curfew in three provinces wracked by days of unrest that have left almost 50 dead, and said he was ready to take additional steps to protect the nation.
Alior Bank SA, whose initial public offering was the biggest in Warsaw last year, added 1.3 percent to a record level. Bank Zachodni WBK SA started coverage of the stock with a buy rating.
Pannergy Nyrt., a Hungarian renewable energy company, jumped 9.1 percent in Budapest, snapping a four-day losing streak, after KBC Groep NV raised its recommendation on the stock, saying the biggest weekly slump on record was overdone.
Emirates NBD PJSC, the biggest United Arab Emirates’ lender by assets, increased to the highest since October 2011 on speculation that it may announce a higher dividend after reporting fourth-quarter results. The bank is due to report earnings Jan. 30, according to a statement to the Dubai bourse.
National Bank of Ras Al-Khaimah, a U.A.E.-based lender, surged 10.5 percent to a record in Abu Dhabi. The bank said its profit rose to 1.4 billion dirhams ($381 million) last year from 1.2 billion dirhams in 2011.
The MSCI emerging-markets measure has added 0.7 percent this year, trailing a 4.8 percent increase in the MSCI World Index. The developing-nations index trades for 10.9 times estimated profit, compared with the MSCI World’s multiple of 13.6, data compiled by Bloomberg show.
Chinese industrial companies’ profits increased 17.3 percent last month from a year earlier to 895 billion yuan ($144 billion), the National Bureau of Statistics said yesterday in Beijing.
“The industrial data is a good sign that China’s growth recovery is gaining traction,” Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila, said by phone today. “The global economic outlook will improve and that will help soften the slump in technology shares.”
Haitong Securities Co. surged 8.2 percent in Shanghai after regulators expanded the number of stocks allowed for margin trading and short selling. Shanghai will increase the tally to 300 from 180 stocks currently, according to a statement from the city’s stock exchange. Shenzhen will increase the number to 200 from 98, its exchange said in a separate statement. The changes will take effect Jan. 31.
Anta Sports Products Ltd. jumped 7.4 percent in Hong Kong, the biggest gain in the MSCI emerging-markets index. The company may boost its dividend payout ratio as orders improve, Raymond Ching, analyst at Bank of America Corp., wrote in a note dated Jan. 25.
China Cosco fell the most in more than two months after saying it may get a “special treatment” designation and investors should be aware of risks. The Tianjin, China-based company posted a net loss of 4.87 billion yuan ($782 million) in the first half of 2012 and a loss of 10.5 billion yuan in 2011.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries was little changed at 256 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.