Emerging-market technology stocks rose on better-than-estimated earnings at Tencent Holdings Ltd. Russian and Brazilian shares fell led by commodity producers.
Tencent, China’s largest Internet company by revenue, surged to a record in Hong Kong, while NHN Corp., South Korea’s biggest search-engine operator, jumped 7.5 percent in Seoul. OAO Novolipetsk Steel, a Russian steelmaker, plunged in London and Asseco Poland SA, a Polish software maker, led declines in Warsaw as MSCI Inc. said it was removing the stocks from its country indexes. Turkey’s lira weakened as the central bank cut interest rates more than forecast.
The MSCI Emerging Markets Index was little changed at 1,046.33. Sixty-eight percent of the technology companies in the MSCI index that reported first-quarter earnings beat analysts’ estimates, compared with 49 percent for the broader index.
“Most technology and telecom companies will show strong earnings growth this year on new products and higher demand,” Sasikorn Charoensuwan, head of research at Phillip Securities (Thailand) Pcl in Bangkok, said by phone. “Still, the global economy remains weak, with disappointing economic data.”
U.S. government reports today showed housing starts dropped more than forecast while jobless claims jumped to the highest level in six weeks. The Federal Reserve may reduce its $85 billion in monthly bond-buying as early as this summer amid signs the economy is gaining strength, Fed Bank of San Francisco President John Williams said today.
Foreign direct investment in China rose 0.4 percent from a year earlier to $8.4 billion, the Ministry of Commerce said in a statement today. That was less than the 5.7 percent gain in March and the 6.2 percent median estimate in a Bloomberg News survey of eight analysts.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose five basis points, or 0.05 percentage point, to 275 basis points, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.
The iShares MSCI Emerging Markets Index exchange-traded fund lost 0.4 percent to $43.23. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, fell 2.8 percent to 18.87.
Brazil’s Ibovespa declined 0.3 percent as oil company OGX Petroleo & Gas Participacoes SA slumped 4.8 percent. Iron-ore producer Vale tumbled 2.4 percent, falling a fifth day.
Russia’s Micex Index fell 1.3 percent, retreating for a fifth day, its longest losing streak since April 18. Novolipetsk slid 4.9 percent in Moscow, while its depositary receipts lost 4.7 percent in London.
Asseco Poland dropped 3.7 percent, snapping a five-day rally. The WIG20 Index slipped 0.8 percent. Alior Bank SA, a Polish lender, surged 6.7 percent in Warsaw after the announcement of its pending inclusion in the MSCI Poland Index.
Turkey’s lira pared losses after the country’s credit rating was raised to investment grade by Moody’s Investors Services Inc. for the first time in two decades as the government reduced its debt and current-account deficits.
China’s Shanghai Composite Index added 1.2 percent, while the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong dropped 0.6 percent. South Korea’s Kospi index advanced 0.8 percent to the highest since April 1.
Tencent gained 6.5 percent after net income rose 37 percent to 4.04 billion yuan ($657 million) in the three months through March. Profit exceeded the 3.75 billion-yuan average of eight analyst estimates compiled by Bloomberg.
Daewoo Shipbuilding & Marine Engineering Co., the world’s third-largest shipbuilder, lost 11 percent in Seoul, its biggest drop since August 2011 and the steepest decline in the developing-nations gauge. The shipbuilder reported yesterday a 42 percent decline in first-quarter profit.