Emerging-market stocks tumbled the most in 10 months and currencies depreciated as disappointing Chinese manufacturing data and speculation the Federal Reserve will scale back stimulus cut demand for riskier assets.
Taiwan Semiconductor Manufacturing Co., the world’s largest contract maker of chips, slumped the most since June in Taipei. Cosco Pacific Ltd., the container-terminal arm of China’s biggest shipping group, retreated 2.1 percent in Hong Kong. OAO Rosneft, Russia’s biggest oil producer, fell 2.2 percent in Moscow as crude dropped. The Philippine peso and South Korea’s won weakened at least 1.2 percent against the dollar while the Turkish lira slid to the lowest in a year.
The MSCI Emerging Markets Index lost 2 percent to 1,027.13 at 4:10 p.m. in Hong Kong, poised for the steepest decline since July 23. The gauge’s 30-day volatility rose to 12, the highest level in seven months. China’s manufacturing unexpectedly shrank for the first time in seven months, according to a report today from HSBC Holdings Plc and Markit Economics. Japan stocks tumbled the most since the aftermath of the Fukushima disaster in 2011, leading equities lower.
“Weak data from China combined with speculation the Fed may phase out quantitative easing are causing jitters in the market,” Paul Joseph Garcia, who helps manage the equivalent of $18 billion as head of institutional business at BPI Asset Management Inc., said in Manila. “Investors are taking off some money on the table, reducing their holdings of risk assets.”
Fed Chairman Ben S. Bernanke said yesterday the central bank could “step down” the pace of asset purchases if the labor market continues to improve and “we have confidence that that is going to be sustained.”
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong tumbled 2.8 percent, the most since April 5. Thailand’s SET Index slumped 2.4 percent while Taiwan’s Taiex Index retreated 1.9 percent, the most since April 8. South Korea’s Kospi index sank 1.2 percent and India’s S&P BSE Sensex retreated 1.5 percent.
Russia’s Micex Index dropped 2.3 percent, heading for the sharpest loss since Nov. 13. Rosneft tumbled the most since April 17 as oil fell 1 percent. OAO Gazprom, the world’s biggest gas producer, lost 2.6 percent in Moscow.
Trading volumes in the Taiex were 75 percent above the 30-day average while volumes for the Shanghai Composite, Sensex and Jakarta Composite Index were at least 36 percent higher, data compiled by Bloomberg show.
The peso fell 1.2 percent while the won slid 1.3 percent to a five-week low. The lira weakened 0.4 percent against the dollar.
The May preliminary reading for HSBC and Markit’s Chinese Purchasing Managers’ Index was 49.6, down from April’s final 50.4 level. A reading below 50 indicates contraction. The May number missed the 50.4 median estimate in a Bloomberg News analyst survey. The final reading is due on June 3.
Bernanke said a premature withdrawal of stimulus could endanger the U.S. economic recovery as policy makers debated tapering the pace of its bond purchase program.
Japan’s Topix Index slumped 6.9 percent, the most since March 2011, as financial companies plunged amid rising bond yields.
Gauges of technology shares and industrial companies in the MSCI Emerging Markets Index dropped at least 2.4 percent, the most among 10 industry groups. Taiwan Semiconductor lost 3.6 percent, its third day of declines. Cosco Pacific fell the most since April 29.
Daewoo International Corp. tumbled 5.7 percent in Seoul after Mirae Asset Securities Co. cut its share-price estimate to 45,000 won from 50,000 won, citing a dim industrial outlook.
Ranbaxy Laboratories Ltd., India’s biggest drugmaker, fell 8.6 percent in Mumbai after Japanese parent Daiichi Sankyo Co. said it was pursuing “legal remedies” against former shareholders for hiding information relating to U.S. investigations of the company.
PT Media Nusantara Citra dropped 9.7 percent in Jakarta, the biggest decline in the MSCI Emerging Markets Index. About 233.5 million shares crossed today at a discount to yesterday’s close, data compiled by Bloomberg show.
The MSCI developing-nations gauge has sank 2.7 percent this year, compared with a 12 percent increase in the MSCI World Index of developed-country stocks. The emerging-markets measure trades at 10.4 times 12-month projected profit, compared with the MSCI World’s 14 times, data compiled by Bloomberg show.